Kerala High Court
M/S. Royal Engineering Contractors vs Bharat Petroleum Corporation Ltd on 27 March, 2024
Author: T.R.Ravi
Bench: T.R.Ravi
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE T.R.RAVI
WEDNESDAY, THE 27TH DAY OF MARCH 2024 / 7TH CHAITHRA, 1946
WP(C) NO. 12991 OF 2024
PETITIONER:
M/S. ROYAL ENGINEERING CONTRACTORS,
REPRESENTED BY ITS MANAGING PARTNER SHAFEER.V.M.,
XIV/488, MALOTH BUILDING,
PUTHENCRUZ, ERNAKULAM, PIN - 682303
BY ADVS.
K.R.GANESH
ELVIN PETER P.J. (SR.)
GOURI BALAGOPAL
SREELEKSHMI A.S.
RESPONDENTS:
1 BHARAT PETROLEUM CORPORATION LTD.
BHARAT BHAVAN 4 AND 6,
REPRESENTED BY THE CHAIRMAN/ MANAGING DIRECTOR.
CURRIMBHOY ROAD, BALLARD ESTATE,
P.B. NO. 688 MUMBAI, MAHARASHTRA, PIN - 400001
2 THE EXECUTIVE DIRECTOR I/C
BHARAT PETROLEUM CORPORATION LTD.,
KOCHI REFINERY, AMBALAMUGAL,
ERNAKULAM, PIN - 682302
3 THE GENERAL MANAGER IN CHARGE (MAINTENANCE)
BHARATH PETROLEUM CORPORATION LIMITED,
KOCHI REFINERY, ERNAKULAM, PIN - 682302
SRI. M. GOPIKRISHNAN NAMBIAR, SC.
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
27.03.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
WP(C) NO. 12991 OF 2024
2
T.R. RAVI, J.
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W. P. (C). No.12991 of 2024
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Dated this the 27th day of March, 2024
JUDGMENT
The writ petition has been filed challenging the termination of a
contract as per Ext.P3. Ext.P3 is a notice of termination stating that
the notice is issued under Clause 42 of the General Conditions of
Contract, which is binding on both the parties. As per the Clause, the
respondent shall, in addition to any other right enabling it to
terminate the contract, have the right to terminate the contract at
any time by giving prior written notice of at least 14 days to the
contractor. The respondent has complied with the said condition of
notice. The Clause further says that the termination shall be without
prejudice to the rights of the parties that have accrued on or before
the date of termination of the contract. Thus the right of the
petitioner on termination is also safeguarded and the Clause further
says about the compensation to which the contractor will be entitled
in case of such termination.
2. The counsel for the petitioner relied on the decision in ABL
International Ltd. and Another V. Export Credit Guarantee
WP(C) NO. 12991 OF 2024
Corporation of India Ltd. and Others [(2004) 3 SCC 553], with
particular reference to paragraph 10, wherein the Court had held that
if a State acts in an arbitrary manner even in a matter of contract, an
aggrieved party can approach the Court by way of writ. The Court
had relied on the earlier decisions in K.N. Guruswamy V. State of
Mysore (AIR 1954 SC 592) and other cases. Reference is also
made to the judgment in Reliance Energy Ltd. and Another V.
Maharashtra State Road Development Corpn. Ltd. and Others
[(2007) 8 SCC 1]. In paragraph 36 of the said judgment, the Court
held that standards applied by Courts must be justified by
constitutional principles which govern the proper exercise of public
power in a democracy. After referring to the judgment in I.R.Coelho
V. State of Tamil Nadu [(2007) 2 SCC 1], the Court dealt with the
aspect of level playing field in the matter of contracts and held that
failure to satisfy the test of reasonableness even in contractual
matters can invite judicial review. I do not think that the principles
laid down in the said judgments will apply to the case of this nature.
This is a case where the contract provides for termination of the
contract and also speaks about the consequences of such termination.
The parties have agreed on the basis of the said condition in the
WP(C) NO. 12991 OF 2024
contract. As such, this is not a matter in which this Court should be
exercising its jurisdiction under Article 226. The contractual rights of
the parties are very much kept intact even by the termination. I do
not find any reason to entertain this writ petition.
The writ petition is dismissed.
Sd/-/--/-
T.R. RAVI
JUDGE
Pn
WP(C) NO. 12991 OF 2024
APPENDIX OF WP(C) 12991/2024
PETITIONER EXHIBITS
EXHIBIT P1 TRUE COPY OF THE ORDER DATED 03.08.2022
AWARDING THE CONTRACT TO THE PETITIONER BY
THE 1ST RESPONDENT.
EXHIBIT P2 RELEVANT EXTRACT OF THE GENERAL CONDITIONS
OF THE CONTRACT OF THE BPCL.
EXHIBIT P3 TRUE COPY OF THE NOTICE DATED 18.03.2024
ISSUED TO THE PETITIONER TERMINATING THE
CONTRACT AWARDED TO THE PETITIONER UNDER
EXT.P1.
