THE HON'BLE THE CHIEF JUSTICE UJJAL BHUYAN
AND
THE HON'BLE SRI JUSTICE N. TUKARAMJI
WRIT APPEAL No.169 OF 2023
JUDGMENT: (Per the Hon'ble the Chief Justice Ujjal Bhuyan)
Heard Mr. Chalakani Venkat Yadav, learned counsel
for the appellant and Mr. M.A.K.Mukheed, learned counsel
for the second respondent.
2. This intra-court appeal has been preferred by the appellant against the order dated 03.01.2023 passed by the learned Single Judge allowing writ petition No.45549 of 2022 filed by the second respondent as the writ petitioner.
3. Second respondent had filed the related writ petition taking exception to the order dated 22.11.2022 passed by the Vice Chairman and Managing Director of Telangana State Civil Supplies Corporation Limited (briefly, 'the Corporation' hereinafter), which is in appeal before us. By the aforesaid order, the contract awarded to the second respondent was terminated along with forfeiture of security 2 deposit and bank guarantee for violation of contractual agreement.
4. Appellant had issued Notice Inviting Tender (NIT) on 22.12.2021 for transportation of food grains, pulses or any other commodities for the period from 01.10.2021 to 30.09.2023 to all the thirty three districts of the State of Telangana. Present writ petition relates to transportation of such food grains to the District of Nalgonda.
5. It is not necessary to dilate on the details of the tender proceedings. Suffice it to say, second respondent participated in the tender process pursuant to NIT relating to Nalgonda District and was declared as the successful bidder on 09.02.2022. Thereafter, the contract was awarded to the second respondent on 25.08.2022 on which date an agreement was also entered into between the appellant and the second respondent. One of the conditions of the contract was that all the twenty four (24) vehicles of the contractor should be installed with GPS device. But it was stated that out of the twenty four (24) 3 vehicles of the second respondent, only ten vehicles (10) had GPS devices. Appellant alleged in the impugned order that the second respondent did not respond to telephonic calls of the agency assigned for installation of GPS devices in the vehicles of the contractor for the remaining fourteen (14) vehicles.
6. Adverting to clause 9(iii) of the contract as well as clause 13(vi) thereof, appellant took the view that since the second respondent had failed to install GPS devices within fourteen (14) days from the issue of the appointment order, the contract should be terminated with forfeiture of earnest money deposit, security deposit and bank guarantee. Accordingly, the contract was terminated.
7. Learned Single Judge was of the opinion that there was a lapse of eight months on the part of the appellant in issuing the appointment order. While acknowledging that the second respondent failed to install GPS devises in all the vehicles to be deployed for the contract, learned Single Judge nonetheless took the view that there were clear 4 lapses on the part of the appellant in issuing the appointment order. The vehicles were hired by the second respondent and they could not be kept in such an uncertain condition for an indefinite period. Learned Single Judge further noted the contention of the second respondent that it was ready with all the twenty four (24) vehicles installed with GPS devices and had furnished the vehicle particulars. In such circumstances, learned Single Judge set aside the order dated 22.11.2022 and directed the appellant to allow the second respondent to run the vehicles for the purposes of the contract.
8. We have heard learned counsel for the parties and perused the terms and conditions of the contract.
9. Clause 65 of the contract says that any dispute arising out of the tender shall be resolved as per the Arbitration and Conciliation Act, 1996. This clause is equally applicable to both the parties in the contract.
10. We are of the view that without negotiations and without taking recourse to such dispute resolution 5 mechanism, appellant was not justified in straightaway terminating the contract and at the same time forfeiting security deposit and bank guarantee of respondent No.2.
11. We find that while passing the order dated 22.11.2022, the second respondent was not heard. Thus, the said order was passed in violation of the principles of natural justice and contrary to clause 65 of the terms and conditions of the contract.
12. While we concur with the view taken by the learned Single Judge that the approach of the appellant was abrupt and drastic, we are however of the view that instead of the writ court directing enforcement of the contract, it would be more appropriate to remit the matter back to the appellant for taking a fresh decision in accordance with law including the terms and conditions of the contract and after giving due opportunity of hearing to the second respondent.
13. Accordingly, we modify the order passed by the learned Single Judge in paragraph 7 of the judgment and 6 order dated 03.01.2023 passed in writ petition No.45549 of 2022 and remand the matter back to the appellant for taking a fresh decision as stated hereinabove. Till such decision is taken, order dated 22.11.2022 shall remain in abeyance. It is also open to the appellant to settle the issue with the second respondent inasmuch as object of the contract is transportation of essential commodities for use of the public.
14. Let the above exercise be carried out within a period of fifteen (15) days from the date of receipt of a copy of this order. All contentions are kept open.
15. The writ appeal is accordingly disposed of.
Miscellaneous applications pending, if any, shall stand closed. However, there shall be no order as to costs.
______________________________________ UJJAL BHUYAN, CJ ______________________________________ N. TUKARAMJI, J 03.03.2023 vs