Orissa High Court
M/S. Group No.5 Security Service vs State Of Odisha And Others .... Opposite ... on 20 August, 2025
Author: Murahari Sri Raman
Bench: Murahari Sri Raman
IN THE HIGH COURT OF ORISSA AT CUTTACK
W.P.(C) No.13384 of 2025
M/s. Group No.5 Security Service .... Petitioner
Mr. Susanta Kumar Mishra, Advocate
-versus-
State of Odisha and others .... Opposite Parties
Mr. Kailash Chandra Kar,
Government Advocate for O.P. Nos.1, 2 & 4
Mr. Bibhu Prasad Tripathy, Senior Advocate
assisted by Mr. Parth Agarwal, Advocate for O.P. No.3
Mr. Satya Smruti Mohanty, Advocate for Intervener
CORAM:
THE HON'BLE THE CHIEF JUSTICE
AND
THE HON'BLE MR. JUSTICE MURAHARI SRI RAMAN
ORDER
Order No. 20.08.2025
03. 1. The challenge is made to a letter no.4490/Kandhamal, dated 9 th
April, 2025 issued by the Chief District Medical & Public Health
Officer-cum-District Mission Director, Kandhamal (CDM & PHO-
cum-DMD, Kandhamal) terminating the contract entered into by
and between the said authority and the petitioner for housekeeping
services at Government Health Institutions in the said district by
invoking clause-4.8 of the Request For Proposal (RFP).
2. Pursuant to the notice inviting tender, as the Government
decided to outsource the housekeeping services at different
Government Health Institutions, the petitioner was adjudged as
successful bidder and was awarded contract. The said letter is
served upon the petitioner conveying the intention of the authority
that the said contract is terminated as despite several reminders to
improve the service, the same has not been adhered to.
3. Before we proceed to interpret clause-4.8 of the RFP, it would
be apposite to reproduce the same, which runs thus:-
"4.8. Termination/Suspension of Contract
The District Authority/Institution may by a notice in writing,
suspend the contract if the selected agency fails to perform any of
his obligations including carrying out the services, provided that
such notice of suspension shall specify the nature of failure, and
shall request remedy of such failure within a period not exceeding
15 days after the receipt of such notice.
The District Authority/Institution after giving 30 days clear
notice in writing expressing the intension of termination by stating
the ground/grounds on the happening of any of the events (as
mentioned below), may terminate the agreement after giving
reasonable opportunity of being heard to the service provider.-
1) If the service provider do not remedy a failure in the
performance of his obligations within 15 days of receipt
of notice or within such further period as the District
Authority/Institution have subsequently approve in
writing.
2) If the service provider becomes insolvent or bankrupt.
3) If, as a result of force majeure, the service provider is
unable to perform a material portion of the services for
a period of not less than 60 days; or
4) If, in the judgment of the District Authority/Institution,
the service provider is engaged in corrupt or fraudulent
practices in competing for or in implementation of the
project."
4. We can safely proceed on the score that the termination of the
contract is made by taking aid of clause-4.8 of the RFP and,
therefore, the said clause is required to be considered and
interpreted for a limited purpose of its strict adherence thereto.
5. Clause-4.8 of the RFP bestowed power upon the authorities to
terminate or suspend the contract in the event the selected agency
fails to perform any of the obligations and despite having made
known to the deficiencies have failed to remedy the same within the
stipulated time. The second paragraph of the said clause postulates
that a notice in writing expressing the intention of termination is to
be given to the selected agency by stating the grounds on the
happening of the event "as mentioned below". The incidents of the
ground of termination are also incorporated therein in separate sub-
clauses. If we read the letter of termination impugned in the instant
writ petition, it can be reasonably inferred that the authorities were
not satisfied with the quality of services which the petitioner was
expected to provide and have also failed to remedy despite being
reminded from time to time. Had it been a notice strictly within the
purview of the said clause or the tenet thereof indicating the
compliance thereto, the position would have been different. The
notice dated 9th April, 2025 is issued by terminating the contract in
a straight manner as the fresh tender has already been undertaken
and the successful bidder is also declared therein.
6. Though the termination was stated to take effect after thirty
days from the date of the notice, there is no iota of doubt in our
mind upon reading the contents of the said letter that the authorities
have terminated the contract under clause-4.8 of the said concluded
agreement. The said clause does not postulate the termination
simpliciter, but a notice of thirty days is to be given expressing the
intention to terminate the contract specifying the grounds as
mentioned therein and above all, reasonable opportunity of hearing
is also required to be given to the service provider. The right of
hearing is ingrained and inhered in the fundamental principles of
adjudication unless the statute expressly excludes such right. A
person should not be penalized nor to be condemned without
affording an opportunity of hearing being a facet of principles of
natural justice based upon the legal maxim audi alteram partem.
Almost all the Courts in the country have embraced the necessity of
adherence to the principles of natural justice and the action of the
authority or the Court in violation of such principles was
susceptible to be interfered with. The importance of the principle of
natural justice has not been whittled down. However, a paradigm
shift is noticed subsequently when the concept of "prejudice" has
also been brought within the ambit of the principles of the natural
justice. Even if we take those principles for the purpose of the given
case, we find the existence of both the elements as not only the
principles of natural justice is violated but simpliciter termination of
a contract would cause a greater prejudice to the petitioner. The
moment, the parties have agreed to incorporate the terms and
conditions in the concluded contract, any of the parties cannot resile
therefrom nor be permitted to vary, modify or omit any of such
clauses unilaterally.
7. It is manifest from the notice under challenge that the authority
though mentioned clause-4.8 of the RFP, did not strictly adhere to
the procedures and/or mechanisms agreed upon and, therefore, the
said order of termination cannot be sustained.
8. Accordingly, the writ petition is allowed. The impugned Letter
No.4490/Kandhamal, dated 9th April, 2025 issued by the Chief
District Medical & Public Health Officer-cum-District Mission
Director, Kandhamal (CDM & PHO-cum-DMD, Kandhamal) is
hereby quashed and set aside. However, it will not prevent the
authorities to proceed afresh by following the
procedures/mechanism provided under clause-4.8 of the RFP.
9. Since the impugned letter is set aside and the writ petition is
disposed of, the Interlocutory Application for intervention becomes
infructuous and, accordingly, disposed of.
(Harish Tandon)
Chief Justice
(M.S. Raman)
Judge
MRS/Laxmikant
Signed by: LAXMIKANT MOHAPATRA
Designation: Senior Stenographer
Reason: Authentication
Location: High Court of Orissa, Cuttack
Date: 22-Aug-2025 17:15:29
