M/S K. PRO INFRA WORKS PVT. LTD. Vs. STATE OF MANIPUR

JUDGEMENT

(1.) THE petitioner, a Company registered under Companies Act, 1956, has filed this writ application for quashing the order passed by the Loktak Development Authority, respondent No.2, terminating the contract entered between the petitioner, Company and the respondent No.2 dated 2.11.2009 and also for other reliefs such as ­ to restrain the respondents from taking any adverse action in pursuance of the termination of the contract, to restrain the respondents from forfeiting the security deposit and encashing the Bank Guarantees pending arbitration proceeding, for a direction to release the outstanding payment against the pending bills and also to maintain status quo in respect of the work.

(2.) THE brief facts leading to filing of the writ petition are as follows: The Loktak lake is one of the largest fresh water lakes in North East. Considering degradation of the said lake, a Short Term Action plan was drawn up by Wet Land International -Sorth Asia and proposal was submitted to the Planning Commission of India to bring back the lake into its original condition. The said proposal was accepted by the Planning Commission and a sum of Rs.373.99 crores was sanctioned in March, 2009 for the following works:

(3.) MR . HS Paonam, learned Sr. counsel appearing for the petitioner has assailed the order of termination basically on 3(three) grounds. The first ground of challenge is that the order of termination dated 3.5.2013 has been passed in exercise of powers under sub clause (3) (a) and 3(c) of the contract whereas there is no such clause in the contract. The second ground of challenge is that much before the termination of the contract and consideration of the reply given by the petitioner, Company to the show cause notice, a decision had already been taken by the respondent No.2 to terminate the contract in Annexure -A/22. Therefore, issuance of notice to show cause and consideration of the reply of the petitioner, Company was just a formality. The third ground of challenge is that delay in execution of the work is mainly attributable to non - cooperation on the part of the respondent No.2 and its officers and therefore, only on ground of delay in execution of the work, the contract could not be terminated.