Page No.# 1/24 vs The Union Of India And Ors
2025 Latest Caselaw 7312 Gua

Gauhati High Court

Page No.# 1/24 vs The Union Of India And Ors on 16 September, 2025

                                                              Page No.# 1/24

GAHC010106212025




                                                         2025:GAU-AS:12658

                      THE GAUHATI HIGH COURT
  (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)

                        Case No. : WP(C)/2689/2025

         M/S COMT SKC JV
         A-760, SUSHANT LOK, PHASE-1, GURGAON, HARYANA



         VERSUS

         THE UNION OF INDIA AND ORS
         NEW DELHI

         2:THE NORTHEAST FRONTIER RAILWAY ( CONSTRUCTION) OFFICE
          REPRESENTED BY ITS GENERAL MANAGER
          CONSTRUCTION
          P.O. MALIGAON
          GUWAHATI
          KAMRUP(M)
         ASSAM-781011

         3:THE CHIEF ENGINEER CON
          NORTHEAST FRONTIER RAILWAY
          NORTHEAST FRONTIER RAILWAY CONSTRUCTION OFFICE
          GMC
          GUWAHATI
          KAMRUP METROPOLITAN
         ASSAM 781011

         4:THE DEPUTY CHIEF ENGINEER CON TENDER
          NORTHEAST FRONTIER RAILWAY
          MALIGAON
          P.O MALIGAON
          GUWAHATI KAMRUP METROPOLITAN
         ASSAM 781011

         5:IDFC FIRST BANK LIMITED
                                                                              Page No.# 2/24

                REPRESENTED BY ITS SENIOR MANAGER
                WITH ITS REGISTERED OFFICE AT EXPRESS BUILDING
                2ND FLOOR
                9-10 BAHADUR SHAH ZAFAR MARG
                NEW DELHI-110002 AND HAVING ITS LOCAL OFFICE AT 1ST FLOOR
                A.G PLAZA
                G.S ROAD
                CHRISTIAN BASTI
                GUWAHATI
                ASSAM 78100

     Advocates for the petitioner     : Mr. K. N. Choudhury, Sr. Advocate.
                                        Mr. A. Gautam


     Advocate for the respondents     : Mr. G. Goswami, S.C. NFR

Mr. A. K. Dutta, CGSC.

:::BEFORE:::

HON'BLE MR. JUSTICE KARDAK ETE

Date of hearing : 09.09.2025 Date of judgment & order : 16.09.2025

JUDGMENT & ORDER (CAV)

Heard Mr. K. N. Choudhury, learned Senior Counsel assisted by Mr. A. Gautam, learned counsel for the petitioner. Also heard Mr. G. Goswami, learned Standing Counsel, N.F. Railway and Mr. A. K. Dutta, learned Central Government Standing Counsel for the respondents.

2. By filing this writ petition, the petitioner has put to challenge the notice Page No.# 3/24

dated 09.04.2025, issued by the respondent No. 3, Chief Engineer/CON, Northeast Frontier Railway (Construction), Guwahati, proposing termination of the contract dated 07.04.2025; the termination notice dated 05.05.2025, whereby the said contract agreement dated 07.04.2025 has been terminated; and also for a direction to allow the petitioner to continue the execution of work allotted under the contract agreement dated 07.04.2025, pursuant to NIT (RFP) dated 27.06.2024 for development of Sairang Railway Station on Engineering, Procurement and Construction ('EPC', for short) mode.

3. The petitioner is a Joint Venture having its Office at Gurgaon, Haryana, constituted between M/s COMT Constructions Private Limited, having its registered Office at Vani Vihar, Uttam Nagar, New Delhi, and M/s S.K. Construction, having its Office at Imphal, Manipur. It is registered under the Partnership act, 1932. The constituent partners, M/s COMT Constructions Private Limited and M/s S. K. Construction, jointly participated in the tender process undertaken by the respondent No. 3 for the development of Sairang Railway Station, Mizoram on EPC mode.

4. A Notice Inviting Tender (NIT) (RFP) dated 27.06.2024 was issued for the contract of undertaking the development of Sairang Railway Station on EPC mode with a tender value of Rs. 76,37,76,009.67/- (Rupees seventy six crore thirty seven lakhs seventy six thousand nine and sixty seven paise) only, which was uploaded on 28.06.2024. The petitioner participated in the tender process, which followed a Single-Stage Two-Packet System comprising of Technical and Financial Bid. The bid submitted by the petitioner, along with the rates offered, was found to be the most suitable, whereupon a Letter of Acceptance (LoA) dated 06.11.2024 was issued in its favour, selecting it to undertake the project. The total cost of the project at the accepted rates was Rs. 71,79,49,448.81/-

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(Rupees seventy one crore seventy nine lakh forty nine thousand four hundred forty eight and eighty one paise) only.

5. The LoA stipulates that the entire work shall be completed within 730 days from the appointed date, as per Article 26.1 of EPC Agreement Document, and authorized the petitioner to commence the work to ensure timely completion of the work as per the terms of the tender documents. Pursuant to the issuance of the LoA, the petitioner submitted a Bank Guarantee dated 28.11.2024 for Rs. 3,58,97,472.44/- (Rupees three crores fifty eight lakhs ninety seven thousand four hundred seventy two and forty four paise) only as Performance Security. It is contended that the petitioner commenced the work at the project site even prior to execution of the contract agreement with the respondent authorities.

6. The petitioner submitted an Earnest Money Deposit of Rs. 38,18,900/- (Rupees thirty lakhs eighteen thousand nine hundred) only, along with the Bank Guarantee, which amounting to a total of Rs. 3,97,16,372.44/- (Rupees three crore ninety seven lakh sixteen thousand three hundred seventy two and forty four paise) only. Considering the urgency expressed by the respondents, the petitioner immediately started mobilizing its machinery, equipment and manpower at the project site for execution of the work and procured raw materials as per the project requirements. Thereafter, petitioner submitted the drawings for the project on 01.02.2025 and re-submitted the same on 17.02.2025, which was approved by the respondents, though the approval was not formally communicated to the petitioner. In the meantime, the petitioner submitted a copy of its original registered Joint Venture Agreement, along with several other documents, to the respondent No. 4 vide letter dated 05.03.2025, which was duly acknowledged and accepted by the respondent authorities.

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7. As per Section 3.3.8 of the Instructions to Bidders (ITB), the Petitioner was required to submit the original registered Joint Venture Agreement following issuance of the LoA and prior to execution of the Contract Agreement. Petitioner contends that this mandate, therefore, stood duly complied with on 05.03.2025. It is contended that as per credible information received by the petitioner, the Legal Department of the Railway Authority had also granted its approval to the validity and sanctity of the said Joint Venture Agreement, vis-à-vis its submission in the relation to the Contract Agreement. Prior to execution of the Contract Agreement, the petitioner submitted its bank account details on 13.03.2025, pursuant to which the respondents generated the required JV Code on 01.04.2025.

8. Upon acceptance of all requisite documents, the parties entered into a Contract Agreement on 07.04.2025. It is contended that, being a responsible contractor, the petitioner immediately, upon issuance of LoA and at the request of the respondents, procured construction materials worth more than Rs. 6,00,00,000/- (Rupees six crore) only for commencement of the project, along with human resources, and additionally incurred expenditure of Rs. 2,00,00,000/- (Rupees two crore) only for mobilizing construction materials and machinery to the project site. Thereafter, the petitioner commenced execution of the work in both day and night shifts, and claims that almost 95% of the earthworks have already been completed.

9. It is contended that while the petitioner was continuing the work in full- swing at the project site, the petitioner received a notice dated 09.04.2025, i.e. merely 2 (two) days after execution of the Contract Agreement dated 07.04.2025, wherein it was show cause for termination on the ground that it had delayed its submission of the original copy of the registered Joint Venture Page No.# 6/24

Agreement before the Registrar/Sub-Registrar for 104 days, which had led to a corresponding delay of 104 (one hundred four) days in the Project Completion Date. The notice, issued under Article 21 of EPC Agreement, granted 15 days' time to submit a representation, failing which the authorities reserved the right to terminate the contract unilaterally.

10. The petitioner contends that it is the admitted position of the respondents, as evident from the Notice dated 09.04.2025, that the respondent authorities were in possession of the copy of the registered Joint Venture Agreement on the date of execution of the Contract Agreement and were fully aware that the said agreement had been submitted on 05.03.2025 in full compliance of Section 3.3.8 of ITB, prior to the execution of the contract agreement. Implicitly, the respondent had waived off any requirement for earlier submission of the Joint Venture Agreement on 21.12.2024 by acquiescence.

11. It is further contended that the interpretation that the registered Joint Venture Agreement ought to have been submitted on or before 21.12.2024 is erroneous and contrary to Section 3.3.8 of the ITB, which requires such submission only after issuance of the LoA, which was issued on 06.11.2024. Therefore, no delay could have been attributed to the Petitioner so as to term it a Contractor's default, especially when the petitioner had been requested to commence work immediately on issuance of LoA and having entered into a Contract Agreement thereafter. It is further alleged that no cure notice, which was a condition precedent under the contract, was ever issued to the petitioner. As a consequence, the respondent No. 3 issued the impugned termination notice dated 05.05.2025, which was served on 14.05.2025.

12. Mr. K. N. Choudhury, learned Senior Counsel for the petitioner, submits Page No.# 7/24

that the entire exercise of terminating the contract is an afterthought, as the respondent authorities have wrongly invoked the alleged lapse of the Cure Period of 60 days. He submits that, as per the definition of "Cure Period" under Clause 1.1.30 of Article 1 of RFP, issuance of a notice requesting the concerned party to cure the alleged defect is a condition precedent. Consequently, the Cure Period of 60 days, which is the substratum of the impugned notice dated 09.04.2025, could only have commenced upon issuance of such a notice, which was never done. Learned senior counsel submits that the respondent authorities, by their conduct, had waived the requirement for submission of the original copy of the registered Joint Venture Agreement prior to 21.12.2024. This, according to him, is evident from the fact that while other compliances were specifically sought from the petitioner through various correspondences, no reference was ever made to the Joint Venture Agreement, which in any case had been duly submitted on 05.03.2025 under cover of the petitioner's letter dated 05.03.2025.

13. Mr. Choudhury, learned senior counsel, submits that the reasoning contained in the impugned notices is pre-determined, arbitrary, and a perverse interpretation of the EPC Agreement, not supported by a plain reading of the relevant clauses. He submits that Section 3.3.8 of the ITB merely provides submission of the original registered Joint Venture Agreement after issuance of the LoA and prior to the execution of the agreement. The petitioner duly submitted the original registered copy of the Joint Venture Agreement on 05.03.2025, which was accepted without protest, and thereafter the Contract Agreement was executed, thereby amounting to acquiescence. He submits that Section 1.3 of the ITB clarifies that the schedule provided in the Key Information Table (KIT) is merely directory and not mandatory in any view of the matter.

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The LoA dated 06.11.2024 expressly authorized the petitioner to commence work, which needs to be read with the Disclaimer' to the ITB which provides the Authority absolute discretion to "update, amend or supplement the information, assessment or assumptions contained in the RFP". In terms, it is submitted that the respondent authority by issuing authorization to commence work to the petitioner had amended the schedule provided in the KIT which in any case was directory in nature.

14. He submits that assuming without admitting that there was a mandatory requirement for submission of the original copy of the Joint Venture Agreement by 21.12.2024, such requirement stood waived by acquiescence. This is evident from the fact that the respondents issued the LoA dated 06.11.2024 directing the petitioner to commence work immediately, subsequently accepted the registered Joint Venture Agreement on 05.03.2025, and thereafter executed the Contract Agreement on 07.04.2025. He submits that the respondent authorities cannot approbate and reprobate by blowing hot and cold in relation to its decision-making. Having made the petitioner initiate work in November, 2024, and having subsequently accepted the Joint Venture Agreement and executed the Contract Agreement, the respondents were not justified in arbitrarily terminating the contract with intent to oust the petitioner from the project.

15. Mr. Choudhury, learned senior counsel, submits that termination of the work at a stage when the petitioner had already invested over Rs. 6,00,00,000 (Rupees six crore), including EMD and Bank Guarantee amounts, and had mobilized men and machinery to the site, amounts to an attempt by the respondents to indirectly accomplish what could not have been done directly, i.e. to carry out the balance work through another contractor while forfeiting the petitioner's security deposit and encashing the Bank Guarantees, thereby Page No.# 9/24

depriving the petitioner of a valuable right. Such termination on flimsy and arbitrary grounds, especially after execution of the contract, is against public interest, as it would necessitate re-tendering or re-awarding of the project, leading to unnecessary expenditure of public fund.

16. Mr. Choudhury, learned senior counsel, submits that the impugned Termination Notice dated 05.05.2025 was issued even after a substantial portion of the earthwork, almost 95%, had been completed, along with deployment of men and machinery since the issuance of the LoA, and that too on wholly arbitrary and pre-determined grounds. Therefore, he submits that the impugned action is illegal, arbitrary, mala fide, unfair, and unreasonable.

17. He submits that while the EPC Agreement contains a dispute resolution clause at Article 24, the same provides for a unilaterally curated panel of arbitrators at the instance of the respondent authorities. Learned senior counsel submits that such a provision is contrary to the judgment of the Hon'ble Supreme Court in Central Organisation for Railway Electrification vs. M/s. ECI SPIC SMO MCML (JV), reported in 2024 INSC 857, wherein it is held such clauses to be in violation of Article 14 of the Constitution, rendering all such clauses void. Accordingly, there is no effective arbitration clause under the Contract Agreement dated 07.04.2025 in light of the law laid down by the Hon'ble Supreme Court.

18. He submits that the impugned show cause notice and termination letter are vitiated by the conduct of Respondents No. 2 to 4 and their prior representations. He submits that the petitioner was issued a show cause notice dated 26.02.2025, granting 15 days' time to submit the registered Joint Venture Page No.# 10/24

Agreement to the respondent authorities and in compliance with this mandate, the petitioner submitted its original Joint Venture Agreement, registered before the Sub-Registrar, Wazirabad, vide its letter dated 05.03.2025. In doing so, the petitioner acted upon a manifest promise contained in the representation of the respondent Railway authorities. Furthermore, after submission of the Joint Venture Agreement pursuant to the petitioner's letter dated 05.03.2025, the respondent Railway authorities executed the Contract Agreement. This execution demonstrated that the Railways had acted upon their promise of granting an extended time for submission of the JV Agreement. Thereafter, it was unlawful for Respondents No. 2 to 4 to renege on their promise by issuing the impugned show cause notice and termination letter, as they were bound by their earlier representation dated 26.02.2025.

19. In support of his submissions, Mr. K.N. Choudhury, learned Senior Counsel, placed reliance on the following judgments:

(i) Union of India Vs. Tantia Construction (P) Ltd., reported in (2011) 5 SCC 697

(ii) Harbanslal Sahnia & Anr. Vs. Indian Oil Corpn. Ltd. & Ors., reported in (2003) 2 SCC 107

(iii) Union of India Vs. Anglo Afghan Agencies Ltd., reported in AIR 1968 SC 718

(iv) Commissioner of Police, Bombay v. Gordhandas Bhanji, reported in AIR 1952 SC 16

(v) Laxmi Devi Sugar Mills Ltd. v. Shri Nand Kishore Singh, reported in AIR 1957 SC 7

(vi) Abhishek Kumar v. HPCL, reported in (2016) 12 SCC 308 Page No.# 11/24

(vii) Singhi Cables & Conductors (P.) Ltd. & Anr. v. Assam State Electricity Board & Ors., reported in (2011) 4 GauLR 787

20. On the other hand, Mr. G. Goswami, learned Standing Counsel for N.F. Railway, submits that in terms of Sl. No. 18 of Clause 1.1.2 (KIT) of the RFP, the Performance Security was required to be submitted within 30 days of the issuance of the LoA, i.e., by 06.12.2024, which the petitioner had duly complied with. Sl. No. 19 of Clause 1.1.2 (KIT) mandated execution of the Contract Agreement within 15 days of submission of the Performance Security, i.e., by 21.12.2024. Additionally, Clause 3.3.8 of Section 3 of the RFP requires submission of the original registered Joint Venture Agreement before the Registrar/Sub-Registrar under the Indian Company Act within 21.12.2024. As per Clause (D)(ii) and (iii) of the EPC Agreement, the selected bidder is required to submit the Performance Security within 30 (thirty) days of issuance of the LoA and thereafter execute the EPC Agreement within 15 (fifteen) days of such submission. He submits that since the petitioner participated in the tender as a Joint Venture, it was mandatorily required to comply with the aforesaid conditions. However, due to non-submission of the registered Joint Venture Agreement within the stipulated date of 21.12.2024, the Contract Agreement could not be executed in time. The registered JV Agreement was submitted only on 07.03.2025 vide letter dated 05.03.2025. The Contract Agreement could be signed only on 07.04.2025, after a delay of 104 days from the stipulated date. This delay in signing the Contract Agreement correspondingly delayed the Appointed Date and Project Completion Date by 104 days.

21. He submits that upon the occurrence of a Contractor's Default, the Authority is entitled to terminate the Agreement by issuing a Termination Notice to the Contractor. However, prior to issuing such Termination Notice, the Page No.# 12/24

Authority must inform the Contractor of its intention to terminate by issuing a notice and granting 15 (fifteen) days' time to submit a representation. Upon expiry of the said period, whether or not any representation is received, the Authority may proceed to issue the Termination Notice.

22. Mr. Goswami, learned Standing counsel that, in terms of Clause 21.1.2 of Article 21 of the EPC Contract Agreement, a 15-day notice was issued to the petitioner vide letter dated 09.04.2025, calling for an appropriate representation. Since no representation was submitted within the stipulated period, the Contract Agreement was terminated in accordance with Article 21 by issuing the Termination Notice dated 05.05.2025. Hence, the termination was strictly in terms of the Contract Agreement and is valid and accordingly, the instant writ petition is deserved to be dismissed under the above facts and circumstances of the case.

23. In support of his submissions, Mr. Goswami, learned Standing Counsel, has placed reliance upon the judgment of Hon'ble Supreme Court in the case of N.G. Projects Limited Vs. Vinod Kumar Jain & Ors, reported in (2022) 6 SCC 127 and Delhi Airport Metro Express Pvt. Ltd. Vs. Delhi Metro Rail Corporation Ltd., decided on 09.09.2021 (Civil Appeal No. 5627 of 2021).

24. Due consideration has been extended to the submissions of the learned counsel for the parties and also perused the materials available on record.

25. The Northeast Frontier Railway invited bids for the work of "Development of Sairang Railway Station on Engineering, Procurement and Construction (EPC) mode" vide Tender No. CE-CON-SANG-EPC-2024-03 dated 27.06.2024 with a tender value of Rs. 76,37,76,009.67/- (Rupees seventy six crore thirty seven Page No.# 13/24

lakhs seventy six thousand nine and sixty seven paise) only. Pursuant to the tender process, the petitioner was declared most suitable, and accordingly LoA dated 06.11.2024 was issued to the petitioner for upgradation of passenger amenities at Sairang Railway Station to modern standards.

26. The LoA stipulates that the entire work shall be completed within 730 days from the appointed date, as per Article 26.1 of EPC Agreement Document, and authorized the petitioner to commence the work to ensure timely completion of the work as per the terms of the tender documents. Pursuant to the issuance of the LoA, the petitioner submitted a Bank Guarantee dated 28.11.2024 for Rs. 3,58,97,472.44/- (Rupees three crores fifty eight lakhs ninety seven thousand four hundred seventy two and forty four paise) only as Performance Security. The petitioner submitted an Earnest Money Deposit of Rs. 38,18,900/- (Rupees thirty lakhs eighteen thousand nine hundred) only, along with the Bank Guarantee, a total of Rs. 3,97,16,372.44/- (Rupees three crore ninety seven lakh sixteen thousand three hundred seventy two and forty four paise) only. The petitioner submitted the drawings for the project on 01.02.2025 and re- submitted the same on 17.02.2025, which was stated to have been approved by the respondents on 05.03.2025. The petitioner submitted a copy of its original registered Joint Venture Agreement with other documents, to the respondent No. 4 vide letter dated 05.03.2025, which was duly acknowledged and accepted on 07.03.2025. Thereafter the parties entered into a Contract Agreement on 07.04.2025

27. It is contended by the petitioner that, being a responsible contractor, immediately, upon issuance of LoA and at the request of the respondents, procured construction materials worth more than Rs. 6,00,00,000/- (Rupes six crore) only for commencement of the project, along with human resources, and Page No.# 14/24

additionally incurred expenditure of Rs. 2,00,00,000/- (Rupees two crore) only for mobilizing construction materials and machinery to the project site. Thereafter, the petitioner commenced execution of the work in both day and night shifts, and claims that almost 95% of the earthworks have already been completed.

28. The respondent authorities vide notice dated 09.04.2025, issued show cause for termination on the ground that it had delayed its submission of the original copy of registered Joint Venture Agreement before the Registrar/Sub- Registrar for 104 days, which had led to a corresponding delay of 104 (one hundred four) days in the Project Completion Date. The notice, issued under Article 21 of the EPC Agreement, granted 15 days' time to submit a representation, failing which the authorities reserved the right to terminate the contract unilaterally. The Contract Agreement was terminated as per Article 21 EPC Agreement vide Termination Notice dated 05.05.2025.

29. Perusal of the termination notice dated 05.05.2025, reflects that LoA was issued on 06.11.2024. As per S. No. 18 of Clause 1.1.2 (KIT) of RFP document, Performance Security is required to be submitted within 30 days of issue of LoA within 06.12.2024. Performance Security was submitted within due date. As per S. No. 19 of Clause 1.1.2 (KIT) of RFP document, Contract Agreement is to be signed within 15 days of submission of Performance Security i.e. within 21.12.2024. As per clause 3.3.8 of Section 3 of RFP, the original copy of Joint Venture Agreement registered before the Registrar/Sub-Registrar under "The Indian Company Act-2013 should be submitted to the Authority before the execution of the Agreement i.e. within 21.12.2024. Due to non-submission of this registered Joint Venture copy to authority, the Contract Agreement couldn't be executed within due date of 21.12.2024. According to the respondent Page No.# 15/24

authorities this delay in execution of Contract agreement has direct impact on Appointed Date and Completion Date of the Project which caused a Material Adverse Effect on the Project and on the Authority. Therefore, default occurred as per Article 21 (Clause 21.1.1 (s)) of EPC Agreement. As per Clause 21.1.1, the petitioner had to cure the default within a Cure Period of 60 (sixty) days i.e. by 19.02.25. However, the petitioner did not submit the requisite documents to Authority for signing of Contract Agreement and therefore failed in curing the default within Cure Period of 60 (sixty) days available as per Article 21 of EPC Agreement. Therefore, the petitioner deemed to be in default of the agreement (the "Contractor's Default") as per article 21.1.1 of the EPC Agreement.

30. A registered Joint Venture copy was submitted to Authority on 07.03.2025 vide letter dated 05.03.2025 JV Code was generated in IRWCMS portal on 01.04.2025 due to which Contract Agreement could be signed on 07.04.2025 after a delay of 104 days. Due to delay in signing of Contract Agreement, the Appointed Date and accordingly Project Completion Date has been delayed equally i.c. 104 days. Therefore, this default (the "Contractor's Default") in signing of Contract Agreement within due date and delaying the Appointed Date and Project Completion date by more than 3 months has caused a Material Adverse Effect on the Project and Authority. As the petitioner committed default (the "Contractor's Default") of failing in submission of requisite documents for signing of Contract Agreement within due date and also within Cure Period of 60 (sixty) days which resulted in delay of signing of Contract Agreement, Appointed Date and Project Completion date and this default (the "Contractor's Default") has caused a Material Adverse Effect on the Project and Authority. Accordingly, 15 days Notice was given vide dated 09.04.2025 in terms of clause 21.1.2 of Article 21 of EPC Agreement to make representation. No representation has Page No.# 16/24

been received by the Authority. Since the period of 15 days' Notice has already expired and no representation has been received by the authority, the Contract Agreement stands terminated in terms of clause 21.1.1 of Article 21 of EPC Agreement.

31. Clause 3.3.8 of the ITB provides that in case, Selected Bidder is a Joint Venture, then on issue of LOA, the Joint Venture Agreement between members of the Joint Venture to whom work has been awarded, with the same shareholding pattern as was declared in the Joint bidding agreement document submitted along with RFP, shall be got registered before the Registrar/Sub- Registrar under "The Indian Company Act-2013 (in case of Company) or before the Registrar/Sub-"The Indian case of Registrar under the Partnership Act-1932 (in Partnership firm) or under LLP Act-2008 (in case of LLP) and deposit the Original copy of Joint Venture Agreement to the Authority before the execution of the Agreement.

32. As per the above clause 3.3.8 of the ITB, the petitioner was required to submit the original registered Joint Venture Agreement following issuance of the LoA and prior to execution of the Contract Agreement. Although there was a delay in submission of said document, the mandate, therefore, stood duly complied with on 05.03.2025 as the Contract agreement was entered on 07.04.2025 on submission of JV Agreement pursuant to the notice dated 26.02.2025. It is also noticed that prior to execution of the Contract Agreement, the petitioner submitted its bank account details on 13.03.2025, pursuant to which the respondents generated the required JV Code on 01.04.2025.

33. Records reveal that the respondent authorities were in possession of the copy of the registered Joint Venture Agreement on the date of execution of the Page No.# 17/24

Contract Agreement and were fully aware that the said agreement had been submitted on 07.03.2025 as per clause 3.3.8 of ITB, prior to the execution of the contract agreement. Therefore, in my view the respondent had waived off any requirement for earlier submission of the Joint Venture Agreement on 21.12.2024 by acquiescence in view of the fact that pursuant to the notice dated 26.02.2025, issued by the respondent authorities (issued after expiry of due date) the petitioner appears to have submitted the JV Agreement.

34. On consideration, it is noticed that the respondent authorities appears to have wrongly invoked the lapse of the "Cure Period" of 60 days under Clause 21.1.1 of the EPC Agreement. As per the definition of "Cure Period" under Clause 1.1.30, issuance of a notice requesting the concerned party to cure the defect would be a condition precedent. Consequently, the Cure Period of 60 days, which is the substratum of the impugned notice dated 09.04.2025, could only have commenced upon issuance of such a notice, which appears to have not done. The respondent authorities can be said to have waived the requirement for submission of the original copy of the registered Joint Venture Agreement prior to 21.12.2024 in view of the fact that while other compliances were specifically sought from the petitioner through various correspondences, no reference was ever made to the Joint Venture Agreement, however JV agreement in any case was submitted vide letter letter dated 05.03.2025 which was acknowledged and accepted by the respondents.

35. It is noticed that the reason for termination, as contained in the impugned notice dated 09.04.2025 and the impugned termination notice dated 05.05.2025, is essentially premised that as per Sl. No. 19 of Clause 1.1.2 (KIT) of the RFP, the Contract Agreement is required to be signed within 15 days of submission of the Performance Security, i.e. within 21.12.2024; that Clause Page No.# 18/24

3.3.8 of Section 3 of the RFP document mandated submission of the original copy of Joint Venture Agreement registered before the Registrar/Sub-Registrar before execution of the Contract Agreement, i.e. within 21.12.2024; that since the registered Joint Venture Agreement was not submitted in time, the Contract Agreement could not be executed within the due date of 21.12.2024; that the delay in execution of the Contract Agreement had a direct impact on the appointed date and completion date of the project, thereby causing a material adverse effect on the project; and that, consequently, a contractor's default had occurred within the meaning of Article 21 of the agreement, which was required to be cured within a period of 60 days in terms of Article 21.1.1, i.e. by 19.02.2025. Since the requisite documents were not submitted within the stipulated period, it is alleged that the petitioner failed to cure the default within the said Cure Period. However, the respondent authorities still continued the process, acknowledged and accepted the original JV Agreement vide letter 05.03.2025 and even executed the Contract Agreement on 07.04.2025.

36. Bare reading of the relevant clauses and particularly clause 3.3.8 of section 3 of the ITB provides for submission of the original registered Joint Venture Agreement after issuance of the LoA and prior to the execution of the agreement. The petitioner has submitted the original registered copy of the Joint Venture Agreement on 05.03.2025, which was acknowledged and accepted by the respondents pursuant to the notice dated 26.02.2025 within 15 days and thereafter the Contract Agreement was executed on 07.04.2025.

37. The respondents issued the LoA dated 06.11.2024 directing the petitioner to commence work and subsequently accepted the registered Joint Venture Agreement vide letter dated 05.03.2025, and executed the Contract Agreement on 07.04.2025. Therefore, the respondents, having subsequently accepted the Page No.# 19/24

Joint Venture Agreement and executed the Contract Agreement, appears to be not justified in terminating the contract on the ground of not submitting the Joint venture agreement within the stipulated time. I fully in agreement with the submission of learned Senior Counsel for the petitioner that the Cure Period, which forms the very substratum of the termination, could only have been triggered upon issuance of a separate notice calling upon the petitioner to cure the alleged defect, as required under Clause 1.1.30 of the RFP Agreement. No such notice was ever issued by the respondents, instead executed the Contract Agreement on 07.04.2025 and then issued the show cause notice dated 09.04.2025 proposing termination. Thus, no delay could have been attributed to the petitioner so as to term it a Contractor's default, especially when the petitioner had been requested to commence work immediately on issuance of LoA and having entered into a Contract Agreement on 07.04.2025.

38. No doubt, the petitioner having been participated in the tender as a Joint Venture, it is required to comply with the terms and conditions of the RFB. Due to non-submission of the registered Joint Venture Agreement within the stipulated date on 21.12.2024, the Contract Agreement could not be executed in time. However, the registered JV Agreement was submitted vide letter dated 05.03.2025 and duly acknowledged and accepted by the respondent authorities on 07.03.2025 and thereafter the Contract Agreement was entered into on 07.04.2025. There is a delay of delay of 104 days, but such delay could not have been attributed to the petitioner alone and could not have been a ground in view of the fact that the registered JV Agreement was submitted vide letter dated 05.03.2025 and duly acknowledged and accepted by the respondent authorities on 07.03.2025 and thereafter the Contract Agreement was entered into on 07.04.2025 even after delay.

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39. As per the terms of the EPC Agreement, upon the occurrence of a Contractor's Default, the Authority is entitled to terminate the Agreement by issuing a Termination Notice to the Contractor and prior to issuing such Termination Notice, the Authority required to inform the Contractor of its intention to terminate by issuing a notice and granting 15 (fifteen) days' time to submit a representation. Upon expiry of the said period, the Authority may proceed to issue the Termination Notice. Accordingly, in terms of Clause 21.1.2 of Article 21 of the EPC Contract Agreement, a 15-days notice was issued to the petitioner vide letter dated 09.04.2025. Although no representation appears to have been submitted by the petitioner, since the notice itself is under challenge and in view of findings herein above, same would be inconsequential as the registered JV Agreement was submitted vide letter dated 05.03.2025 and duly acknowledged and accepted by the respondent authorities on 07.03.2025 and thereafter the Contract Agreement was entered into on 07.04.2025 beyond the stipulated date. Thus, in my considered view, the issuance of impugned notice dated 09.04.2025 and consequential termination notice dated 05.05.2025 are not justified and are unsustainable.

40. On perusal of the both the case laws relied on by the learned counsel for the respondents, I find the same not relevant in view of the fact that in N.G. Projects Limited (Supra), it has been held that since the construction of road is an infrastructure project and keeping in view the intent of the legislature that infrastructure projects should not be stayed, the High Court would have been well advised to hold its hand to stay the construction of the infrastructure project. Such provision should be kept in view even by the Writ Court while exercising its jurisdiction under Article 226 of the Constitution of India. The Writ Court should refrain itself from imposing its decision over the decision of the Page No.# 21/24

employer as to whether or not to accept the bid of a tenderer. The Court does not have the expertise to examine the terms and conditions of the present-day economic activities of the State and this limitation should be kept in view. Courts should be even more reluctant in interfering with contracts involving technical issues as there is a requirement of the necessary expertise to adjudicate upon such issues. The approach of the Court should be not to find fault with magnifying glass in its hands, rather the Court should examine as to whether the decision-making process is after complying with the procedure contemplated by the tender conditions. If the Court finds that there is total arbitrariness or that the tender has been granted in a mala-fide manner, still the Court should refrain from interfering in the grant of tender but instead relegate the parties to seek damages for the wrongful exclusion rather than to injunct the execution of the contract. The injunction or interference in the tender leads to additional costs on the State and is also against public interest. Therefore, the State and its citizens suffer twice, firstly by paying escalation costs and secondly, by being deprived of the infrastructure for which the present-day Governments are expected to work. In the present case, the issue is not of an acceptance or rejection of tender but a case of termination of contract.

41. In Delhi Airport Metro Express Pvt. Ltd. (Supra), the legal issues considered was whether DAMEPL waived their rights to terminate after participating in the reconciliation process and after operating the AMEL for more than five months. As the participation of DAMEPL in several meetings held after issuance of the termination notice dated 09.07.2012 and its decision to continue operating the AMEL was without prejudice, the Tribunal rejected the submission of DMRC that the doctrine of waiver applied and that DAMEPL was estopped from terminating the Concession Agreement after having actively participated in Page No.# 22/24

the process of rectifying the defects pointed out. The Division Bench of the High Court approved the said finding on the ground that the decision of the Tribunal could not be held to be flawed within the limited scrutiny afforded to courts under Section 34 of the 1996 Act. Accordingly, Hon'ble supreme Court has held that the Division Bench of the High Court rightly refrained from interfering with the findings on waiver by the Tribunal. Therefore, in my view, the case is clearly distinguisible for the reason that present case is that after acceptance of the required documents and entered into contract agreement without any demur and thereafter terminated the contract agreement. Therefore, the judgements shall not advance the case of the respondents.

42. In Tantia Construction (P) Ltd. (supra), On the question of maintainability of the writ petition on account of the Arbitration Clause included in the contract agreement, Hon'ble Supreme Court has held that it is now well- established that an alternative remedy is not an absolute bar to the invocation of the writ jurisdiction of the High Court or the Supreme Court and that without exhausting such alternative remedy, a writ petition would not be maintainable. The constitutional powers vested in the High Court or the Supreme Court cannot be fettered by any alternative remedy available to the authorities. Injustice, whenever and wherever it takes place, has to be struck down as an anathema to the rule of law and the provisions of the Constitution.

43. The other case laws referred and relied by the learned senior counsel for the petitioner need no discussion as the same are either well settled principle of law or not relevant for the purpose of the present case. Therefore, in order to avoid burdening this judgement and order, this court refrains from discussing the same.

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44. Reverting back to present case, as noted above, the petitioner was issued LoA on 06.11.2024 with stipulation that the entire work shall be completed within 730 days from the appointed date as per Article 26.1 of EPC Agreement and authorized the petitioner to commence the work to ensure timely completion of the work as per the terms of the tender documents. Admittedly, contract agreement was to be entered into within stipulated from the date of LoA which could not be entered into due to non submission of JV registration agreement. However, the petitioner submitted a copy of its original registered Joint Venture Agreement vide letter dated 05.03.2025, pursuant to the notice dated 26.02.2025, which was duly acknowledged and accepted on 07.03.2025. Accordingly, the parties had entered into Contract Agreement on 07.04.2025. Thereafter, the respondent authorities issued the impugned show cause notice dated 09.04.2025 barely 2 (two) days after the contract agreement and issued the impugned termination notice dated 05.05.2025 on the ground of contractors Default. In my view, such action on the part of respondents authorities reflect arbitrariness as when the JV registration agreement and other documents have already been acknowledged and accepted and thereafter consciously entered into the contract agreement, same cannot be terminated on the ground of mere delay in submission of documents, Thus, notwithstanding the delay in submission of JV agreement when the same is ultimately acknowledged and accepted by the respondent authorities and thereafter entered the contract agreement, the termination of contract clearly smacks of arbitrariness.

45. In view of what has been discussed herein above, I am of the considered view that the issuance of show cause notice dated 09.04.2025 and the termination notice dated 05.05.2025 terminating the contract by respondent authorities are unjustified and therefore, not sustainable. Accordingly, the show Page No.# 24/24

cause notice dated 09.04.2025 and the termination notice dated 05.05.2025 are set aside and quashed. Consequently, the respondent authorities are directed to release/refund the Bid security and EMD amount to the petitioner. It is provided that the petitioner is at liberty to approach the appropriate forum for any other claims as may be permissible under law. However, considering the categorical averment of the petitioner to the effect that third party has been allowed to execute the work in question, the prayer to allow to continue the work is rejected and directed the respondent authorities to complete the work/project expeditiously.

46. Writ Petition stands allowed and disposed of. Costs(s) made easy.

JUDGE

Comparing Assistant