M/S.EAST COAST CONSTRUCTIONS & INDUSTRIES LTD. v INFOPARK KERALA, ICICI BANK LIMITED, IDBI BANK, ADDL.R4 TO R6 IMPLEADED, Addl.4 Loading and Unloading General Workers Union (INTUC), Addl.5 General Construction Workers Union (CITU), Addl.6 Kerala State Headload and General Workers' Union (STU)

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** **THE HONOURABLE MR.JUSTICE P.R.RAMACHANDRA MENON** **MONDAY, THE 31ST DAY OF MARCH 2014/10TH CHAITHRA, 1936** ## **WP(C).No. 29483 of 2013 (I)** **----------------------------** ## **PETITIONER :** **--------------------------** **M/S.EAST COAST CONSTRUCTIONS & INDUSTRIES LTD., BUKHARIA BUILDINGS, NO.4, MOORES ROAD, CHENNAI-600 006, REPRESENTED BY ITS PROJECT MANAGER, SRI.P.SARAVANAKUMAR.** **BY SRI.P.K.SURESH KUMAR,SENIOR ADVOCATE ADVS. SRI.P.MURALEEDHARAN (IRIMPANAM) SRI.M.A.AUGUSTINE SRI.S.EASWARAN** **RESPONDENT(S):** - **----------------------------** **1. M/S.INFOPARK KERALA,''ATHULYA'', KUSUMAGIRI.P.O., KAKKANAD, KOCHI-682 030, REPRESENTED BY ITS CHIEF EXECUTIVE OFFICER.** **2. ICICI BANK LIMITED, COMMERCIAL BRANCH, REPRESENTED BY ITS BRANCH MANAGER,** **NUNGUMBAKKAM, CHENNAI-600 034.** **3. IDBI BANK, REPRESENTED BY BRANCH MANAGER, BRANCH NO.7, CORPORATE BANKING, SOUTH BOAG ROAD, T NAGAR, CHENNAI-600 017.** - ***ADDL.R4 TO R6 IMPLEADED** - **Addl.4. LOADING AND UNLOADING GENERAL WORKERS** - **UNION (INTUC), BRAHMAPURAM, AMBALAMEDU, KOCHI - 682 303, REPRESENTED BY ITS GENERAL SECRETARY ABDUL BASHEER K.A.** - ***Addl.5. GENERAL CONSTRUCTION WORKERS UNION (CITU), BRAHMAPURAM, AMBALAMEDU, KOCHI - 682 303, REPRESENTED BY ITS PRESIDENT M.M.THANKACHAN.** **2/-** **sts** **-2-** ## **WPC.NO.29483/2013** ***Addl.6. KERALA STATE HEADLOAD AND GENERAL WORKERS' UNION (STU),BRAHMAPURAM, AMBALAMEDU, KOCHI - 682 303, REPRESENTED BY ITS PRESIDENT P.M.KAREEM.** ***ADDITIONAL RESPONDENTS 4 TO 6 IMPLEADED AS PER ORDER DATED 10.12.2013 IN IA.NO.16661/2013.** **R1 BY ADVS.SRI.M.GOPIKRISHNAN NAMBIAR SRI.P.GOPINATH SRI.P.BENNY THOMAS SRI.K.JOHN MATHAI SMT.RASHMI. K.V., SC, INFOPARK R2 BY ADVS. SRI.LAL K.JOSEPH SRI.A.A.ZIYAD RAHMAN SRI.JOJO GEORGE SRI.V.S.SHIRAZ BAVA ADL.R4 TO R6 BY ADV. SRI.P.RAMAKRISHNAN** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 13-01-2014, THE COURT ON 31-03-2014 DELIVERED THE FOLLOWING:** **sts** ## **WP(C).No. 29483 of 2013 (I) ----------------------------------------** ## **APPENDIX** |**PETITIONER(S)' EXHIBITS**|**PETITIONER(S)' EXHIBITS**| |---|---| |**-------------------------------------**|| |**EXT.P1:**|**COPY OF WORK ORDER DATED 18TH NOVEMBER, 2013 ALONG WITH**| ||**THE RELEVANT EXTRACT OF THE GENERAL CONDITIONS OF**| ||**CONTRACT.**| |**EXT.P2:**|**COPY OF BANK GUARANTEE DTED 24/11/2011 ISSSUED BY THE 2ND**| ||**RESPONDENT.**| |**EXT.P2(A):**|**COPY OF AMENDED BANK GUARANTEE DATED 4/12/2012 EXTENDING**| ||**THE PERIOD OF BANK GUARANTEE UPTO 31/12/2013.**| |**EXT.P3:**|**COPY OF BANK GUARANTEE DATED 20/9/2011 ISSUED BY THE 3RD**| ||**RESPONDENT.**| |**EXT.P4:**|**COPY OF LETTER DATED 23/7/2013 ISSUED BY THE 1ST RESPONDENT**| ||**TO THE PETITIONER.**| |**EXT.P5:**|**COPY OF LETTER DATED 7/11/2013 OF THE PETITIONER AND**| ||**ADDRESSED TO THE CHIEF EXECUTIVE OFFICER OF THE 1ST**| ||**RESPONDENT.**| |**EXT.P6:**|**COPY OF REPLY DATED 16/11/2013 ISSUED BY THE 1ST RESPONDENT**| ||**TO THE PETITIONER.**| |**EXT.P6 IN**|**COPY OF THE LETTER DATED 29/11/2013 SENT BY THE**| |**IA.NO.16508/2013) COUNSEL FOR THE PETITIONER TO 2ND RESPONDENT**|| |**EXT.P7:**|**COPY OF LETTER DATED 21/11/2013 SUBMITTED BY THE PETITIONER**| ||**BEFORE THE CHIEF EXECUTIVE OFFICER OF THE 1ST RESPONDENT.**| |**EXT.P7 IN**|**COPY OF THE REPLY DATED 2/12/2013 SENT BY THE 2ND**| |**IA.NO.16508/2013) RESPONDENT TO THE COUNSEL FOR THE PETITIONER**|| ||**THROUGH FAX**| |**EXT.P8:**|**COPY OF PROCEEDINGS DATED 25/11/2013 ISSUED BY THE CHIEF**| ||**EXECUTIVE OFFICE OF THE 1ST RESPONDENT.**| |**EXT.P9:**|**COPY OF THE MEMORANDUM OF ASSOCIATION, RULES AND**| ||**REGULATIONS AND BYE LAWS OF THE 1ST RESPONDENT**| |**EXT.P10:**|**COPY OF THE LETTER DATED 13/07/2013 OF THE PETITIONER TO THE**| ||**1ST RESPONDENT ALONG WITH THE SCHEDULE**| |**EXT.P11**|**COPY OF THE LETTER DATED 29TH OCTOBER, 2013 OF THE 1ST**| ||**RESPONDENT TO THE PETITIONER.**| **2/-** **-2-** ## **WP(C)NO.29483/2013** **EXT.P12 COPY OF THE AGREEMENT DATED 28TH NOVEMBER,2011 EXECUTED BETWEEN INFOPARK AND THE PETITIONER COMPANY** **EXT.P13 COPY OF THE MINUTES OF THE 34TH MEETING OF THE BOARD OF GOVERNORS OF INFOPARK KERALA.** **RESPONDENT(S)' EXHIBITS** **---------------------------------------EXT.R1(A) COPY OF THE LETTER BEARING NO.INFOPARK/ECC/HO/1896A/2011, DATED 28/12/2011 EXT.R1(B) COPY OF THE E-MAIL DATED 29/12/2011 FROM THE 1ST RESPONDENT TO MR.ARAVINDAN, SITE ENGINEER OF THE PETITIONER. EXT.R1(C) COPY OF THE LETTER BEARING NO.INFOPARK/ECC/HO/241/2012, DATED 17/02/2012 EXT.R1(D) COPY OF THE LETTER DATED 5/01/2012 FROM THE PROJECT MANAGEMENT CONSULTANT OF THE 1ST RESPONDENT EXT.R1(E) COPY FO THE LETTER DATED 28/01/2012 FROM THE PROJECT MANAGEMENT CONSULTANT OF THE 1ST RESPONDENT EXT.R1(F) COPY OF THE LETTER DATED 3/2/2012 FROM THE 1ST RESPONDENT TO THE PETITIONER. EXT.R1(G) COPY OF THE LETTER DATED 3/3/2012 FROM THE 1ST RESPONDENT TO THE PETITIONER. EXT.R1(H) COPY OF THE REVISED SCHEDULE SUBMITTED BY THE PETITIONER ON 2/3/2012 BEFORE THE PROJECT MANAGER OF THE 1ST RESPONDENT EXT.R1(I) COPY OF THE LETTER DATED 19/12/2012, FROM THE PETITIONER EXT.R1(J) COPY OF THE LETTER DATED 08/01/2013 FROM THE PETITIONER TO THE 1ST RESPONDENT EXT.R1(K) COPY OF THE LETTER DATED 18/07/2013 FROM THE PETITIONER TO THE 1ST RESPONDENT EXT.R1(L) COPY OF THE LETTER DATED 24/02/2012 ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER. EXT.R1(M) COPY OF THE LETTER DATED 14/3/2012 ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER. EXT.R1(N) COPY OF THE MINUTES OF MEETING DATED 10/4/2012 3/-** **-3-** ## **WP(C)NO.29483/2013** |**EXT.R1(O)**|**COPY OF THE LETTER DATED 02/06/2012 ISSUED BY THE 1ST**| |---|---| ||**RESPONDENT TO THE PETITIONER.**| |**EXT.R1(P)**|**COPY OF THE LETTER DATED 30/06/2012 ISSUED BY THE 1ST**| ||**RESPONDENT TO THE PETITIONER.**| |**EXT.R1(Q)**|**COPY OF THE LETTER DATED 14/07/2012 ISSUED BY THE 1ST**| ||**RESPONDENT TO THE PETITIONER.**| |**EXT.R1(R)**|**COPY OF THE LETTER DATED 16/07/2012 ISSUED BY THE 1ST**| ||**RESPONDENT TO THE PETITIONER.**| |**EXT.R1(S)**|**COPY OF THE LETTER DATED 26/09/2012 ISSUED BY THE 1ST**| ||**RESPONDENT TO THE PETITIONER.**| |**EXT.R1(T)**|**COPY OF THE LETTER DATED 12/02/2013 ISSUED BY THE 1ST**| ||**RESPONDENT TO THE PETITIONER.**| |**EXT.R1(U)**|**COPY OF THE LETTER DATED 27/03/2013 ISSUED BY THE 1ST**| ||**RESPONDENT TO THE PETITIONER.**| |**EXT.R1(V)**|**COPY OF THE LETTER DATED 11/06/2013 ISSUED BY THE 1ST**| ||**RESPONDENT TO THE PETITIONER**| |**EXT.R1(W)**|**COPY OF THE LETTER DATED 01/07/2013 ISSUED BY THE 1ST**| ||**RESPONDENT TO THE PETITIONER.**| |**EXT.R1(X)**|**COPY OF THE LETTER DATED 23/07/2013 ISSUED BY THE 1ST**| ||**RESPONDENT TO THE PETITIONER.**| |**EXT.R1(Y)**|**COPY OF THE LETTER DATED 31/07/2013 ISSUED BY THE 1ST**| ||**RESPONDENT TO THE PETITIONER.**| |**EXT.R1(Z)**|**COPY OF THE LETTER DATED 16/11/2013 ISSUED BY THE 1ST**| ||**RESPONDENT TO THE PETITIONER.**| |**EXT.R1(AA)**|**COPY OF THE STATEMENT SHOWING THE DATE OF SUBMISSION OF**| ||**BILLS BY THE PETITIONER AND DATE OF PAYMENT MADE BY THE 1ST**| ||**RESPONDENT**| |**EXT.R1(AB)**|**COPY OF THE MINUTES OF THE MEETING HELD AT INFOPARK**| ||**PROJECT OFFICE, KAKKANAD ON 23/4/2013**| |**EXT.R1(AC)**|**COPY OF THE RELEVANT PAGE OF THE HINDRANCE REGISTER**| ||**MAINTAINED BY THE 1ST RESPONDENT**| |**EXT.R1(AD)**|**COPY OF THE LETTER DATED 27/11/2013 FROM THE PETITIONER TO**| ||**THE PROJECT MANAGER OF THE 1ST RESPONDENT**| |**EXT.R1(AE)**|**COPY OF THE LETTER DATED 28/11/2013 ISSUED BY THE LABOUR**| ||**UNIONS**| **4/-** **-4-** ## **WP(C)NO.29483/2013** **EXT.R1(AF) COPY OF THE LETTER DATED 29/11/2013 ISSUED BY M/S. ICICI BANK TO THE 1ST RESPONDENT** **EXT.R1(AG) COPY OF THE MINUTES OF THE 34TH MEETING OF THE BOARD OF GOVERNORS OF INFOPARKS, KERALA HELD ON 12/11/2013** **/TRUE COPY/** **P.A.TO.JUDGE** **sts** ## **P.R. RAMACHANDRA MENON, J.** ======================== W.P.(C). No. 29483 of 2013 -------------------------------------------Dated this the 31st day of March, 2014 ## **JUDGMENT** Whether Ext.P8 termination of the work contract awarded to the petitioner before expiry of the extended tenure as per Ext. P4 (till 30.06.2014), that too, without giving any opportunity of hearing is correct or sustainable, forms the dispute raised in this writ petition. 2. The main grounds of challenge are that, the Chief Executive Officer (CEO)/issuing authority is not competent to have terminated the contract, as awarding of contract and termination can only be by the 'Owner', who is the Inforpark (a Society) headed by the Board and further that, no mandatory notice of '7 days', as stipulated in Clause 33 of Ext.P1 work contract was ever given to the petitioner at any point of time. There is also a case for the petitioner that, the stipulation in Ext.P8 termination order, that it should be “at the risk and cost” of the petitioner, is not supported by any enabling provision/terms of Ext.P1 contract and hence bad in all respects. W.P.C. No. 29483 of 2013 -2- 3. The petitioner, a Company registered under the relevant provisions of Companies Act, 1956, is stated as a specialist in effecting various construction activities at different levels/spheres, who was awarded Ext.P1 work contract by the first respondent for construction of an 'IT building' and for providing such other infrastructure. The contract of nearly 56₹ crores, stipulates various aspects as to the nature and extent of work to be done and the time for completion; also specifying the requirements to be satisfied from either side, and the remedial measures in case of any default/breach. 4. The case of the petitioner is that, despite awarding Ext.P1 work to the petitioner, stipulating the period of completion as '15 months' from the date of commencement, there was inordinate delay on the part of the first respondent in hading over the site completely, which was actually effected only on 31.3.2012. Considering the factual aspects pointed out by the petitioner, the time for completion was extended up to '30.06.2014', granting the full extent of 15 months from 31.3.2012. The petitioner furnished two Bank Guarantees through the respondents 2 and 3, as borne by Exts. P2/P2(a) and P3. It is stated that, despite the extension of time twice, by the W.P.C. No. 29483 of 2013 -3first respondent, invoking Clause '31' of the work order (because of the delay resulted from the part of the first respondent in satisfying the requirements from their side) the petitioner was put to suffer huge loss for different reasons. It was in the said circumstance, that the 'time' fixed earlier was re-scheduled and the period for completion of work was extended till '30.06.2014', as per Ext.P4 proceedings dated 23.7.2013. 5. The petitioner contends that, as borne by Ext.P4, the petitioner was required to give an 'Indemnity Bond' to consider the release of the 'Seed Fund', which was satisfied by the petitioner; despite which extension of Seed Fund support was not given and it was accordingly, that Ext.P5 representation was submitted after Ext.P4 extension. This was declined as per Ext.P6 reply, whereupon the sequence of events was sought to be explained and highlighted by submitting Ext.P7 representation. Without considering the various aspects pointed out in Ext.P7, the CEO/first respondent issued Ext.P8 order dated 25.11.2013, simply terminating the contract, invoking Clause 33 of the conditions of the contract, holding that the work will be rearranged through other agencies and the loss, if any, would be realised from the petitioner. This in turn is under challenge in W.P.C. No. 29483 of 2013 -4- this writ petition. 6. The first respondent has filed a counter affidavit producing copies of the relevant documents, mainly contending that it is a Society registered under the Travancore Cochin Literary Scientific and Charitable Soicieties Registration Act, 1955 and that no writ will lie against a Society. Maintainability of the writ petition is also sought to be challenged with reference to the fact that, the cause of action is in respect of Ext. P1 work contract, which cannot be got adjudicated by way of a writ petition under Article 226 of the Constitution of India. The factual aspects pointed out by the petitioner have been sought to be rebutted, seeking to assert that the CEO is competent to have issued Ext.P8 termination order and that, prior notice of '7' days was not necessary, in view of the specific waiver of said term, as per the proceedings held on 23.04.2013, the minutes of which have been produced as Ext.R1(ab). In response to the contention raised by the petitioner that the termination order (if at all any, to be issued by the CEO) has to be on the basis of the advice/order of the 'Board' of the first respondent (the Owner), it is stated that, there is already a Board decision in this regard and that Ext.P8 has been issued accordingly. The petitioner has filed W.P.C. No. 29483 of 2013 -5a reply affidavit as well. 7. Heard Sri. P.K. Sureshkumar, learned Senior Counsel for the petitioner and also Mr. Gopinatha Menon for and on behalf of the first respondent. 8. With regard to the maintainability of the writ petition, it is true that the first respondent is a Society registered under the Travancore Cochin Literary Scientific and Charitable Societies Registration Act, 1955. As to the nature and constitution of the first respondent Society, the materials on record reveal that, most of the members are Government Secretaries representing various Departments of the Government of Kerala and quite a lot of public fund is involved with regard to the affairs of the first respondent. The materials on record reveal control of the Government over the first respondent. It has been held by the Apex Court in the decision reported in **Sri. Anadi Mukta Sadguru Shree Muktagee Vandasjiswami Suvarna Jayanti Mahothsav Smarak Trust and Others** v. **V.R. Rudani and Others AIR 1989 (SC) 1607** that, writ petition will lie (even against an individual) by virtue of specific wording and mandate of Article 226 of the Constitution of India, provided, there is a 'public duty' to be discharged, by the concerned respondent. This W.P.C. No. 29483 of 2013 -6- has been re-iterated by the Apex Court in several subsequent decisions as well. Applying the position of law to the given case, it cannot but be held that, the exclusion pleaded from the part of the first respondent with reference to the status as a 'Society', to remain outside the jurisdiction of this Court under Article 226, is not attractive. 9. With regard to the challenge as to the maintainability, referring to the contractual nature of the cause of action, it is true, that the position of law has been made clear by the Apex Court and this Court on many an occasion that, contractual rights and liberties cannot be sought to be established through a Writ petition under Article 226 of the Constitution of India. But it is also the law declared by the Apex Court and by this Court that, alternative remedy cannot be a bar in appropriate cases and writ petition is maintainable, if the test with regard to the violation of the statutory provisions or violation of principles of natural justice is established. Whether the petitioner's case forms an exception as above, is the point to be considered. 10. As mentioned hereinbefore, Ext.P8 order of termination is challenged mainly on two grounds that, it has been issued without any authority of law by an incompetent person/CEO and W.P.C. No. 29483 of 2013 -7- further that, the mandatory notice of '7' days as prescribed under Clause 33 has admittedly not been issued and hence that, it has been passed in a quite arbitrary manner, in violation of the principles of natural justice. The fact that no notice has been issued under Clause 33 stands admitted from the part of the first respondent, which is discernible from Ext.P8 order itself. But the version of the first respondent is that, no such notice was necessary, in view of the 'waiver' of such notice by the petitioner on a prior occasion, as borne by Ext.R1(ab) dated 23.4.2013. The stand of the petitioner is that, Ext. R1(ab) minutes have lost significance, as the 'so-called waiver' was with reference to the specific time schedule mentioned therein, which was later erased/nullified by virtue of the subsequent developments leading to Ext.P10 representation and Ext.P4 proceedings dated 23.07.2013, whereby the time for completion was extended upto 30.06.2014. As such, it requires to be considered whether there is any violation of the principles of natural justice, in view of the admitted fact that no notice was issued. As it stands so, this Court is of the view that the petitioner cannot be non-suited before arriving at a finding on this issue and hence the question of maintainability is answered in favour of the petitioner. W.P.C. No. 29483 of 2013 -8- 11. With regard to the merits involved, the definite case of the petitioner is that, the delay in completing the work was because of the lapse on the part of the first respondent. It is stated that the delay of several months in completely handing over the site, has caused huge loss to the petitioner, on various counts. The facts and figures were brought to the notice of the first respondent then and there, and it was accordingly, that extension of time was granted twice. It is conceded that, the petitioner had expressed willingness to waive any further notice for termination, if the time schedule stipulated in Ext.R1(b) was not adhered to. But things took a different turn, because of the lapse on the part of the first respondent under different heads and it was on realizing the said fact, that the time schedule already fixed as per Ext.R1(ab) was done away with, pursuant to Ext.P10 and a revised target was fixed as per Ext.P4 proceedings dated 23.07.2013, extending time for completion upto 30.06.2014. It is also the case of the petitioner that, all the critical works are already over and the remaining work, mainly with regard to the super structure, will be completed in no time, at any rate, before expiry of the stipulated time. Ext.P10 submitted by the petitioner has led to Ext.P4, whereby the time W.P.C. No. 29483 of 2013 -9- was extended upto 30.06.2014, wherein no condition as to any waiver of notice has been incorporated; unlike in the earlier proceedings i.e., Ext.R1(ab), which has virtually become irrelevant or insignificant as on date. 12. The learned counsel for the first respondent submits that, this is a case where, more support than the eligible extent was extended to the petitioner at different points of time, by way of release of funds, arranging direct purchase of raw materials like cement and steel and under various other heads. Such extension of support was beyond the terms of the contract and it was only with intent to see that the work was completed somehow or the other. Despite extension of all such favours/help, no substantial work was completed by the petitioner and the position continued, without yielding any positive result, but for futile assurances. It was only on finding that the petitioner had not completed the requisite extent of work, even after the last extension as per Ext.P4; that the first respondent invoked Clause 33 of Ext.P1 contract and terminated the contract as per Ext.P8, also stipulating that the work will be re-arranged through other agencies and that the loss will be realised from the petitioner. The learned counsel asserts that, W.P.C. No. 29483 of 2013 -10- huge loss has already been sustained because of the lapse/delay on the part of the petitioner and that the petitioner is liable to compensate for the same. The project, which was originally to be completed within 15 months, is nowhere even after the lapse of nearly three years and as such, the proceedings finalized by the first respondent as per Ext.P8 are not assailable under any circumstance. 13. It is vehemently contended from the part of the petitioner that, Ext.P8 termination of contract is beyond the power and competence of the CEO and that, termination envisaged under Clause 33 of Ext.P1 can only be effected by the Owner, i.e., the Infopark and not by the CEO. Though the term 'Owner' is not defined anywhere in Ext.P1, with reference to the relevant clauses, it is asserted that, it cannot be anybody other than the 'Infopark'; in other words, the 'Board'. In so far as Ext.P8 has admittedly been issued by the CEO and not by the 'Board', it is liable to be intercepted, being per se wrong and illegal in all respects. The learned counsel also places reliance on ' **Clause 24** ' of Ext.P9 Memorandum of Understanding and the Rules and bye-laws produced along with the reply affidavit of the petitioner. W.P.C. No. 29483 of 2013 -11- 14. As per the said provision, power is vested with the Board, and the CEO has to act as per the direction of the 'Board'. The decision making authority is the 'Board' and the power cannot be sub delegated. In response to the said submission, the learned counsel for the first respondent submits with reference to the additional counter affidavit dated 16.12.2013 that, a copy of the minutes of the Board meeting held on 12.11.2013 has been produced as Ext.R1(ag), whereby the Board has given sanction, enabling the CEO to issue 'termination notice'. It is accordingly, that Ext.P8 termination order has been issued by the CEO and as such, the challenge raised by the petitioner as to the power, jurisdiction and authority of CEO to have issued Ext.P8 is no more liable to be entertained; submits the learned counsel. 15. Eventhough it is contended from the part of the petitioner that the authority given by the Board to the CEO was to issue 'notice of termination', it only meant the prescribed notice of '7' days so as to terminate the contract and not an order by itself. Evidently, no such case is set up in the writ petition and such a plea is mooted, on having realised that the challenge with regard to the authority of CEO to have issued Ext.P8, without the consent/approval/sanction of the Board has W.P.C. No. 29483 of 2013 -12- lost its legs and hence not acceptable to this Court. That apart, the specific wording in Ext.R1(ag) proceedings of the Board enables the CEO to issue “ **notice of termination** ” and not “notice for termination”. In the said circumstance, the first ground of challenge raised by the petitioner against the authority of CEO to have issued Ext.P8 is repelled and it is answered against the petitioner. 16. With regard to the next ground, as to the requirement of '7' days' notice before termination of contract, the relevant clause, i.e., Clause 33 of Ext.P1 dealing with 'Termination of Contract' by the Owner is relevant; which reads as follows: ## “ **33. Termination of Contract by Owner:** If the Contractor being an individual or a firm commits any “Act of Insolvency” or shall be adjudged an insolvent or being an incorporated company shall have an order for compulsory winding up made against it or pass an effective resolution for winding up voluntarily or be subject to the supervision of the court and of official assignee or the Liquidator in such acts of insolvency or winding up, as the case may be, and shall be unable within 7 (seven) days after notice to him requiring him to do so, to show to the reasonable satisfaction of th Owner that he is able to carry out and fulfill the Contract and to give security therefore if so required by the Owner. Or if the Contractor (whether an individual, firm or incorporated company) shall suffer execution to be issued; -13- ## W.P.C. No. 29483 of 2013 Or shall suffer any payment under this Contract to be attached by or on behalf of any of the creditors of the Contractor; Or shall assign or sublet this Contract without the consent in writing of the Owner first obtained; Or shall charge or encumber this Contract or any payments due or which may become due to the Contractor there under Or Architect shall certify in writing to the Owner that the Contractor 33.1 has abandoned the Contract, or 33.2 has failed to commence the work, or has without any lawful excuse under these conditions suspended the progress of the works for 14(fourteen) days after receiving the Owner's notice to proceed, or 33.3 has failed to proceed with such due diligence and failed to make such due progress as would enable the works to be completed within the time agreed upon, or 33.4 has failed to remove the materials from the site or to pull down and replace work for 7 (seven) days after receiving from the Owner written notice that the said materials or work were not approved and were rejected by the Architects / Owner under these conditions, or 33.5 has neglected or failed persistently to observe and perform all or any of the acts, matters or things by this Contract to be observed and performed by the Contractor for 7 (seven) days after written notice shall have been given to the Contractor requiring him (Contractor) to observe and perform the same, or W.P.C. No. 29483 of 2013 -14- 33.6 has acted to the detriment of good workmanship or without the consent in writing of the Owner sub-let any part of the Contract. Then and in any of the said cases the Owner may notwithstanding any previous waiver, after giving 7(seven) days notice in writing to the Contractor, and shall record the measurements of work executed by the Contractor in the presence of their Representatives, if available at site, determine the Contract, without thereby affecting the powers of the Owner or the obligation and liabilities of the Contractor the whole of which shall continue to be in force as fully as if the Contract had not been so determined and as if the works subsequently executed had been executed by or on behalf of the Contractor. And further the Owner with his Agents or servants may enter upon and take possession of the works and all plants, tools, scaffoldings, sheds, machinery, steam or other power utensils and materials lying upon the premises or the adjoining lands or roads, and use the same as his own property or may deploy the same by means of his own servants and workmen in carrying on and completing the works or by employing other Contractor or person or persons to complete the works and the Contractor/s shall not in any way interrupt or do any act, matter, or thing to prevent or hinder such other Contractor/s or other person or persons employed for completing and finishing or using the materials and plant for the works. When the works shall be completed or as soon as thereafter as convenient the Owner shall give notice in writing to the Contractor to remove his surplus material and plant, and should the Contractor fail to do so within a period of 14 (fourteen) days after receipt of such notice by him the Owner shall be entitled to sell the same by public auction and give credit to the Contractor for the amount realized.” The stand of the first respondent is that, by virtue of the waiver of prior notice, as agreed by the petitioner, in the meeting held on 23.04.2013 as borne by Ext.R1(ab), it was no more necessary W.P.C. No. 29483 of 2013 -15- to have issued any further notice for termination of the contract. It is also stated that, no prejudice has been caused to the petitioner in any manner and that the course and events were very much known to the petitioner, who does not have a case that the petitioner had satisfied the requirement to the desired extent, as agreed in between. 17. With regard to the alleged waiver, it is true that, when the schedule was fixed as per the meeting on 23.04.2013 as per Ext.R1(ab), it was agreed that, in case of failure, it would be open for the first respondent to have terminated the contract without further notice. But admittedly, such a course was not pursued by the first respondent, who however yielded for modification by re-scheduling the activity pursuant to Ext.P10, leading to Ext.P4 proceedings dated 23.7.2013, granting extension of time upto 30.06.2014. In Ext.P8 order itself, the first respondent has referred to such extension upto 30.06.2014, based on the revised time schedule submitted by the petitioner along with the letter dated 13.7.2013 (recommendation from M/s. Pithavadian & Partners Consultants). There is a further reference in Ext.P8, as to the meeting conducted at Chennai on 8.10.2013, in presence of one Khalid Buhari, Executive Chairman W.P.C. No. 29483 of 2013 -16- of ECCI, Mr. Parthasarathi of Pithavadian & Partners and CEO Infopark; when the revised schedule was submitted by the petitioner, agreeing to complete the work to the specified extent. It was with reference to the non achievement of the above requirement, that the contract was terminated as per Ext.P8, admittedly, without notice, but seeking to justify such course with reference to the waiver clause as per Ext.R1(ab) dated 23.4.2013. 18. This Court finds considerable force in the submission from the part of the petitioner, that Ext.R1(ab) has lost its significance with regard to the 'waiver clause', in so far as the time schedule mentioned therein was admittedly modified by the first respondent, taking note of the subsequent events and the mitigating circumstance on either side, which led to the extension of tenure till 30.6.2014, as per Ext.P4 dated 23.7.2013. When the contract is terminated with reference to Clause 33 of Ext.P1, allegedly 'at the risk and cost' of the petitioner, it has also to be borne in mind as to whether the resultant loss, if any, can be realised from the petitioner, except to the extent as specifically covered under Ext.P1 contract, particularly, under **Clause 9** . The said clause reads as follows: ## W.P.C. No. 29483 of 2013 -17- ## “ **9. Liquidated damages (not a penalty)** In case the entire work is not completed within the stipulated period due to action or inaction on the part of the Contractor, the Contractor will be liable to pay liquidated damages as follows. ½ % of the total value of work for each weeks delay beyond the date of completion specified in the Contract subject to a maximum of 5% of the total value of the Contract value after which the Contract will stand cancelled.” This is more so, in view of the case put forth by the petitioner that, Ext.P1 contract does not provide for any other course, as now contained in Ext.P8. This Court however does not express any opinion in this regard, as it is for the appropriate authority to consider the same, at the appropriate time, in appropriate proceedings. 19. The only point that is being examined is whether the mandatory notice of '7' days was necessary or whether the 1st respondent is justified in having denied such opportunity with reference to the alleged waiver on an earlier occasion. After mentioning the sub clauses 1 to 6 under Clause 33 of Ext.P1, it is incorporated thereunder, somewhat in the nature of a 'proviso' as follows: “ **Then and in any of the said cases, the Owner may** W.P.C. No. 29483 of 2013 -18- **notwithstanding any previous waiver, after giving 7(seven) days notice in writing to the Contractor** , ........” This suggests that, in all the '6' cases mentioned above, '7' days' notice in writing has to be issued to the contractor, notwithstanding any previous waiver, so as to have the contract terminated; further stipulating that measurement of the work shall be recorded. The word “ **may** ” appearing in the said clause has necessarily to be read as “ **shall** ”, in view of the 'non obstante clause' and the course to be pursued as mentioned therein. To what extent prejudice, if any, has been resulted to the petitioner, is a matter to be highlighted by the petitioner, the merits of which need not be examined by this Court in this writ petition. 20. In the course of hearing, the learned Senior Counsel for the petitioner submits that termination of the contract at this stage could only be detrimental to the public interest as well, as it may lead to very higher rate to complete the balance work, if to be executed through some other agency, which on the other hand will be completed by the petitioner within the extended time, i.e., before 30.6.2014. It is also asserted that, the petitioner has already provided two Bank Guarantees, the first of which (as per Ext.P2/P2(a)) is to an extent of 6,72,12,177/- in₹ W.P.C. No. 29483 of 2013 -19- respect of 'mobilization advance' disbursed already. The mobilization advance has to be recovered from the running bills and about 50% of recovery is stated as already over. Despite the interim order of 'status quo' passed by this Court, the said Bank Guarantee was encashed by the respondents and as such, the amount is available with the first respondent. That apart, Ext.P3 Bank Guarantee is for a sum of 5,60,10,148/- towards₹ 'performance guarantee', which is only by way of security and the same is also lying in tact. In addition to this, to prove the bonafides of the petitioner, the learned counsel submits that the petitioner is ready to pump in another sum of 1 crore₹ to be kept in an 'escrow account' and shall produce receipt of deposit before the first respondent in this regard for satisfactory completion of work within time. 21. After hearing both the sides and having held that, non issuance of the notice of '7' days' prescribed under clause 33 of Ext.P1 contract, referring to waiver at an earlier instance, is not correct or sustainable, this Court finds that, the matter requires to be reconsidered by the first respondent after issuing proper notice in terms of Clause 33. Ext.P8 stands set aside accordingly. 22. Considering the larger public interest involved and the W.P.C. No. 29483 of 2013 -20- possible chance to sustain loss of public money, it may be considered by the first respondent whether the petitioner could be permitted to continue the work within the extended time, i.e., on or before 30.06.2014 as stipulated in Ext.P4, subject to retention of the Bank Guarantees already provided (which are to be kept valid throughout, by the petitioner) and on deposit of a further sum of 1 crore in an 'escrow account' by the petitioner surrendering the receipt of deposit before the first respondent in this regard. The writ petition is disposed of. ## **P.R. RAMACHANDRA MENON, JUDGE.** kp/-