M/S NIRAJ CEMENT STRUCTURALS LTD. v. UNION OF INDIA AND 3 ORS

Court: High Court of Manipur

Bench: HON'BLE THE CHIEF JUSTICE,HONBLE MR JUSTICE LANUSUNGKUM JAMIR

Judgment date: 2020-08-20

Case summary

High Court of Manipur judgment dated 2020-08-20. M/S NIRAJ CEMENT STRUCTURALS LTD. v. UNION OF INDIA AND 3 ORS. Read the judgment and case details on...

Judgment text

WAIKH Digitally signed by WAIKHOM OM TONEN MEITEI Date: IN THE HIGH COURT OF MANIPUR TONEN 2020. 08. 20 17:08:31 AT IMPHAL MEITEI +05'30' W. A. No. 17 of 2019 Niraj Cement Structurals Ltd. in Joint Venture with M/S Manipur Tribal Development Corporation Ltd. (M/s NCSL-MTDCL(JV), Lamphelpat Imphal West, Manipur-795004 through its authorized signatory Shri Ngangbam Robert Singh, aged about 45 years, S/o (L) Ng. Meghachandra Singh of Singjamei Chingamathak Imphal West, Manipur-795001. ……. Appellant - Versus – 1. Union of India represented by the Secretary, Ministry of External Affairs, Government of India, Jawaharlal Nehru Bhawan, New Delhi-110 001. 2. The Joint Secretary (DPA-III) Ministry of External Affairs, Room No. 3113, Jawaharlal Nehru Bhawan, New Delhi- 110 001. 3. Ircon Infrastructure & Service Ltd. , through the Chief Executive Officer(CEO), C-4, District Center, Saket, P. O. & P. S. Saket, New Delhi – 110 017. 4. The Joint General Manager, Ircon Infrastructure & Service Ltd.

, C-4, District Center, Saket, P. O. & P. S. Saket, New Delhi-110 017. …. Respondents BEFORE HON’BLE THE CHIEF JUSTICE MR. RAMALINGAM SUDHAKAR HON’BLE MR. JUSTICE LANUSUNGKUM JAMIR For the appellant : Mr. H. S. Paonam, Sr. Advocate. Mr. A. Arunkumar, Advocate For respondent Nos. 1 & 2 : Ms. Madhavi Divan, ASG Mr. S. Suresh, ASG; For respondent Nos. 3 & 4 : Mr. Abir Phukan, Advocate; Mr. I. Denning, Advocate. Date of hearing : 25. 04. 2019, 11. 06. 2019, 08. 07. 2019, 16. 07. 2019, 22. 07. 2019, 01. 08. 2019, 06. 08. 2019, 27. 08. 2019, 12. 11. 2019, 18. 11. 2019, 26. 11. 2019 04. 12. 2019, 16. 12. 2019, 17. 12. 2019, 20. 01. 2020, 21. 01. 2020, 27. 01. 2020, 28. 01. 2020, 03. 02. 2020,04. 02. 2020 05. 02. 2020, 12. 02. 2020, 02. 3. 2020, 03. 03. 2020. 14. 08. 2020 and 17. 08. 2020 Date of Order : 20. 08. 2020 W. A. No. 17 of 2019 Page 1 ORDER (CAV) Ramalingam Sudhakar, CJ “69 BRIDGES TO MYANMAR” “THE DPR IS TECHNICALLY DEFECTIVE AND NOT VIABLE TO BUILD ONE BRIDGE. LEAVE ALONE 69.

GIVE ME A CHANCE TO BUILD AFTER COURSE CORRECTION,” PLEADS THE APPELLANT. “IN THE IMPLEMENTATION OF A TRILATERAL HIGHWAY IN MYANMAR, THE BILATERAL CONTRACT HAS BECOME FUTILE AS THE APPELLANT WHO COULD NOT BEND ONE BRIDGE, CANNOT BE ENTRUSTED WITH BUILDING 69 BRIDGES,” SAY THE RESPONDENTS. “THE BRIDGE TO MYANMAR IS NOW A BRIDGE TOO LONG AND A BRIDGE TOO FAR AND TO WAIT ANY LONGER, WILL UNTIE THE TREATY,” PLEADS THE UNION OF INDIA. [1] The appellant Contractor invokes Article 226 of the Constitution of India pleading that the action of the respondent No. 1 & 2 to terminate the contract is arbitrary and contrary to the mandatory provisions of the Article of the Engineering Procurement and Construction (EPC, in short) Agreement dated 08. 11. 2017, namely, Article 23. 1. 2. The appellant also pleads that the Detailed Project Report (DPR, in short) is unworkable, making an emphatic allegation of inexactitude that is after the agreement is signed and the work had started.

The appellant pleads that the respondents are at fault and the termination of contract is an attempt to cover up the inherent error in the Detailed Project Report (DPR)/ feasibility report. Respondents, on the other hand, specifically pleaded that the writ petition is not maintainable, it is an abuse of process of court, further the termination notice is perfectly in order W. A. No. 17 of 2019 Page 2 as per Article 23. 1. 2 of the Agreement. Further no cause of action has been pleaded in the writ petition and interim order was obtained by suppression of facts. Since no cause of action arose within the jurisdiction of this Court, the learned Single Judge was correct in dismissing the writ petition. [2] In this case, the appeal was filed on 04. 04. 2019 and taken up for hearing on several dates. Thereafter, both the appellant’s counsel and the respondents’ counsel have been taking substantial time to argue the case. The last hearing was on 03. 03. 2020.

Since it is a commercial litigation and at their instance, the Court gave enough leeway to either side to put forth their arguments. Finally, the arguments got almost concluded but due to COVID- 19 pandemic, the all India lockdown came into force and the Bar categorically stated in writing that they do not want listing of regular old cases during this period and that only urgent motion cases should be taken up. However, on the direction of the Hon’ble Supreme Court, the respective counsels completed their argument on 14. 8. 2020 and 17. 08. 2020. [3] On the various dates of hearing, Mr. H. S. Paonam, learned senior counsel assisted by Mr. A. Arunkumar appeared for the appellant, Ms Madhavi Divan, learned ASG assisted by Mr. S. Suresh, learned ASG appeared for respondent No. 1 & 2 and Mr. Abir Phukan and Mr. Irom Dening learned counsel appeared for respondent No. 3 & 4.

[4] In the course of hearing, it became evident that the writ petition was filed with limited number of documents to cut down the volume, they are Annexure-A/1 to A/15. The respondent No. 1 to 4 in their affidavit-in-opposition dated 14. 01. 2019 filed many documents omitted to be filed by writ petitioner, as Annexure– R/1 to R/17. In the rejoinder affidavit dated W. A. No. 17 of 2019 Page 3 30. 01. 2019, the writ petitioner filed two documents, Annexure-B/1 and B/2. An additional affidavit was filed by the writ petitioner dated 06. 03. 2019 enclosing new documents, Annexure-X1 and X2. These two documents are e-mails said to have been received by the writ petitioner. In the writ appeal after several hearings, further documents were filed by both appellant and the respondents. The following documents were filed on 02. 03. 2020 by respondents No. 1 and 2 through Mr. S. Suresh, learned ASG. (1) Engineering Procurement and Construction (EPC) Agreement dated 08. 11.

2017(Volume- I), (2) Technical Bid(Volume-II), (3) Plan & Profile, General Arrangement Drawings (Volume-III) & (4) Environment Management Plan (EMP) (Enclosure to Addendum No. 02) (Volume-IV). Similarly, Mr. H. S. Paonam, learned senior counsel for the appellant has submitted ‘Compilation-A’ (Annexure II of Schedule A of EPC Agreement) and ‘Compilation-B’ (Annexure III Schedule A of EPC Agreement) on 02. 03. 2020 only. Since a number of documents were filed on different occasions before the writ Court and were annexed loosely in the writ appeal in a disjointed manner at different pages without chronology and without a proper typed set, it caused great difficulty for the Court to proceed in the matter. Besides, most of the documents filed by the Appellant were found to be smudged and unreadable photocopies of the original documents. Some of them were incomplete. There was no cogency, consistency, clarity or legibility to marshal facts. Therefore, in the course of appeal, on 12. 02.

2020, the Court was constrained to issue direction that documents relied by either side should be re-set and filed as per chronology and clear W. A. No. 17 of 2019 Page 4 copies should be placed and by way of a typed set. Accordingly, the documents relied upon by the appellants and respondents before the writ Court were filed by way of a new comprehensive typed set by the appellant on 02. 03. 2020. On the basis of these documents, further hearing was taken up. It is also to be stated that respondents further pleaded that even in the new typed set, some documents are omitted. [5] For the record, at the time of taking up the appeal on 25. 04. 2019, Mr. Abir Phukan, learned counsel appearing for the respondents sought for time till 09. 05. 2019 to file his objection to the interim relief sought for by the appellant by way of a reply affidavit. In the meanwhile, the respondents undertook to keep the matter in abeyance.

That undertaking was not extended beyond a period as could be seen from the Court proceedings. An affidavit was filed by respondent No. 3 on 08. 05. 2019 in the appeal along with documents (R/3/1, R/3/2, R/3/3, R/3/4 & R/3/5). To this, the appellant filed rejoinder affidavit dated 03. 06. 2019. Thereafter, in the appeal, a reply affidavit dated 30. 05. 2019 was filed by respondent No. 1 & 2 along with documents E/1, E/2 &E/3 collectively, to which the appellant filed rejoinder reply affidavit dated 04. 06. 2019 along with Annexure-M1. Written submission on behalf of respondent No. 3 was filed earlier on 30. 01. 2020, Respondent No. 1 & 2 have taken time to file a written submission but they have not filed it so far, however, arguments have been addressed on all aspects. Hence, decision can be rendered without any further delay. In any event, final arguments were addressed by Ms Madhavi Divan, learned ASG along with Mr. S. Suresh, learned ASG for respondent Nos. 1 and 2 and Mr.

Abir Phukan, learned counsel for the respondent No. 3 and 4. Mr. H. S. Paonam, learned senior counsel appears for the appellant. W. A. No. 17 of 2019 Page 5 PRELUDE [6] The advent of “perestroika”, eased the cold war status amongst nations and the principle of “glasnost” (openness) created a good ambience for international trade and related activities between various countries across the continents. The World Trade Organization gave an impetus to international trade by making member countries to agree upon removing the restrictions on imports and exports in respect of innumerable articles and commodities. A large number of articles, goods classified under the Harmonized System Of Nomenclature (HSN) were brought under Open General License (OGL). This resulted in active trade in commodities by way of import and export between member nations and fuelled the great change called ‘globalization’ and ‘liberalization’.

This became a mantra for growth and development of many nations big and small. In a related development, India opened its rural prowess and brought it to the mainstream with the creation of golden quadrilateral road connectivity and it has improved to a very great extent over this period of time. This further improved the movement of goods from one State to another. Farm produce reached value based market and it paved way for decentralization of industries. As a result, production increased, employment increased and it fuelled export and import by land, sea and air. The need to connect neighboring countries by road transport service so that movement of goods can be accelerated in a cost effective manner was visualized. To further this purpose, India undertook collaboration with neighboring countries W. A. No. 17 of 2019 Page 6 for maintaining and developing friendly and good neighbourly relationship and as a result, the Government of India signed the MOU on 29. 08.

2016 with the Republic of the Union of Myanmar for construction /upgradation of 69 bridges in the trilateral highway between India, Myanmar and Thailand. It required construction of 69 bridges with approach road on Tamu-Kyigone- Kalewa Road (TKK) for short. In February, 2014, the MS/ Ircon Infrastructure, respondent No. 3 a subsidiary of Ircon Limited was entrusted the work of preparing the feasibility report/Detailed Project Report and in December 2015, the respondent No. 3 was appointed as a Project Management Consultant (PMC) of this project. It is this project, which is the subject matter of the present litigation. BRIEF FACTS OF THE CASE [7] On the basis of a revised set of documents submitted on 02. 03.

2020, which is a compilation of documents submitted both by the appellant and the respondents, the documents will be identified as follows :- (Annexure-A, B & X) relates to appellant/ writ petitioner, Annexure-R series relates to respondents and new page number(s) are taken as reflected in the revised paper book dated 02. 03. 2020) (i) 03. 04. 2017 (Annexure-A/1 to the writ petition, Page 1) : - Notice inviting bid, NIT was floated inviting bid for construction of 69 bridges including approach roads as mentioned above under the Engineering, Procurement & Construction (EPC) mode. The entire NIT was uploaded on the website and intending bidders have to download and submit the same online. No other means was permitted. W. A. No. 17 of 2019 Page 7 (ii) 16. 10. 2017 (Annexure-X/1 to the Additional Affidavit of the petitioner, Page 2) : - Letter of Acceptance (e-mail) was issued on the basis of bid submitted by e-mail.

However, Annexure-A/2 to the writ petition is the original Letter of Acceptance (LOA) issued to Joint Venture Company, Niraj House Mumbai, Page 160 (Part II) of the Writ Appeal. (iii) 08. 11. 2017 [Annexure-A/3 to the writ petition, Part-II of writ appeal wrongly stated as A/2 in new typed set, Page of 3-14) : - Agreement was signed between the President of India through Ministry of External Affairs, India and M/s NCSL-MTDL JV [M/s. Niraj Cement Structurals Ltd. in JV with M/s. Manipur Tribal Development Corporation Ltd. ] This was signed by M. Subbaraydu, Joint Secretary (DPA-III), Ministry of External Affairs and Mr. Athokpam Devendro Singh as authorized signatory of M/s NCSL- MTDL JV, Niraj House, Sunder Baug, Mumbai. and countersigned by authorized signatory of Ircon Infrastructures & Services Limited also showing Mumbai address. (iv) 07. 12. 2017 (Annexure-R/13/2 of affidavit-in-opposition, Page 15-24) : - review meeting was held in New Delhi. (v) 28. 03.

2018 (Annexure-R/13/2 of affidavit-in-opposition, page 25-28) : - review meeting was held in New Delhi. (vi) 06. 04. 2018 (Annexure-A/10 of Writ Petition, page 29) : - Mr. Manoj Agarwal has been deputed as Team Leader. W. A. No. 17 of 2019 Page 8 (vii) 10. 04. 2018 (Annexure-R/13/2 of affidavit-in-opposition, page 30-37): - Minutes of Review Meeting No. 4 held at Tamu was communicated to the contractor. (viii) 16. 04. 2018 (Annexure-R-13/2 of the affidavit-in-opposition, page 38-45): - Minutes of Review Meeting No. 5 held at Tamu was communicated to the contractor. (ix) 25. 04. 2018 (Annexure-R-13/1 of affidavit-in-opposition, page 46-48): - Statement regarding availability of High Flood Level (HFL) Data with contractor since 25. 04. 2018. (x) 26. 04. 2018 (Annexure/R/13/2 of affidavit-in-opposition, page 49-55) : - Review Meeting was held at Embassy of India in Yangoon. (xi) 28. 04. 2018 (Annexure/R/13/1 of affidavit-in-opposition, page 56-60) : - The minutes of meeting No.

6 held at MOC office-Tamu and site. (xii) 02. 05. 2018 (Annexure R/13/2 of affidavit-in-opposition, page 61-64): - The minutes of Meeting No. 7 held at MOC office at Kalay. (xiii) 11. 05. 2018 (Annexure R/5 of affidavit-in-opposition, page 65-84): - First Show Cause Notice for termination of contract contending: (a) non-availability of lead members (b) non-submission of work programme as per clause 10. 1. 3 of EPC Agreement. (c) Non-technical works of Diversion Roads (d)&(e) Delay in submission of designs and drawings and other works – negligible progress (f) Non-Submission of Quality Assurance Plan (g) Non-Submission of Monthly Progress Report. (h)Not Obtaining Applicable permit and registration of contractor in Myanmar. (i) & (j) Slow mobilization of Manpower & Equipment (k) Non-procurement of Insurance of Project W. A. No. 17 of 2019 Page 9 (l) Default of delay in appointment of Design Director and procurement of professional liability insurance.

(m) Non-sitting of Site laboratory (n) Non-setting up/delay in establishing EPCC Camps. (o) No Progress of Works (p) No. action taken by Contractor inspite of repeated reminders for Termination. (q) Non availability of funds / delay in applying for mobilization advance. All these were supported by documents and Review Meeting letters etc. This show cause notice was issued to the appellant address at Niraj House, Sunder Baug, Near Deoner Bus Depo, Chembur, Mumbai. (xiv) 21. 05. 2018 (Annexure –A/4 of the writ petition, page 85): - The Contractor/appellant informed the Team Leader TKK Project about the inability to locate GPS pillars. (xv) 25. 05. 2018 (Annexure –R/12 of affidavit-in-opposition, Page 86-89 filed as B/2 in the rejoinder affidavit of writ petition dated 30. 01. 2019): - A comprehensive reply to the letter dated 21. 05. 2018 of the petitioner, along with technical article on accuracy of GPS and manner in which it should be approached. (xvi) 28. 05.

2018 (Annexure-R/13/8 of affidavit-in-opposition, page 100-101): - It is filed by respondents requesting inspection for sub soil investigation. (xvii) 18. 06. 2018 (Annexure-R/6 of affidavit-in-opposition, page 102-105): - The Notice granting 15 days time to the contractor/appellant/writ petitioner to make representation in terms of Clause No. 23. 1. 2 of EPC Agreement to show cause as to why the authorities should not W. A. No. 17 of 2019 Page 10 proceed to terminate the agreement in issue for construction of 69 bridges. This was issued to the appellant’s address, Niraj House, Sunder Baug, Near Deoner Bus Depot, Chembur, at Mumbai. In it, Annexure-A is the Summary of Defaults made by the contractor in breach of the contract. (xviii) On 25. 06.

2018 (Annexure-R/7 of affidavit-in-opposition, page 106-109): - Review Meeting was held at New Delhi and recorded that the Review Meeting is without prejudice to the course of action to be deciding following the end of Termination Notice period of 15 days and the appellant was asked to submit reply to the Termination Notice. (xix) 28. 06. 2018 (Annexure-R/13/9 of affidavit-in-opposition, page 110-113): - The request for investigation of Bridge No. 2. (xx) 10. 07. 2018 (Annexure-R/13/10 of affidavit-in-opposition, page 114-117): - The request for inspection of subsoil investigation at Bridge No. 1 (xxi) 02. 07. 2018 (Annexure-B/1 to the rejoinder affidavit, page 118-122): - Reply of the appellant/contractor to the Show Cause Notice dated 18. 06. 2018 [filed as Annexure-R/6 of the affidavit-in-opposition (Sl. No. xvii of this list)]. (xxii) 02. 07.

2018 (Annexure-R/13/5 of affidavit-in-opposition, Page 123-126): - Letter of the appellant contractor informing that two separate agencies have been deployed on the same sector to fix anomalies in coordinates of control station. (xxiii) 09. 07. 2018 (Annexure-R/15 of affidavit-in-opposition, page 127-133): - Letter of the appellant contractor submitting 3(three)months plan. (xxiv) 21. 07. 2018 (Annexure-R/13/6 of affidavit-in-opposition, page 134-135): - Letter of AE informing that two more reference pillars were found intact. W. A. No. 17 of 2019 Page 11 (xxv) 11. 08. 2018 (Annexure-R/13/2 of affidavit-in-opposition, page 148- 150): - The minutes of Meeting No. 8. (xxvi) 12. 08. 2018 (Annexure-R/13/2 of affidavit-in-opposition, page 151-153): - The minutes of Meeting No. 9. (xxvii) 10. 10. 2018 (Annexure-R/14 of affidavit-in-opposition, page 154-159): The status of work site as on 10. 10. 2018.

Thereafter, there are some documents which is relevant to work site, which may not be relevant at the present, however, this documents were submitted by respondents, namely, (Annexure-R/14 of affidavit-in-opposition) (xxviii) 02. 11. 2018 (Annexure-R/8 of affidavit-in-opposition, Page No. 183-198): - The Show Cause why action should not be taken against the contractor including termination of contract for various default identified at serial No. (i)-(xvi) invoking clause 23. 1. 1 (A)(D)(E)(H)(J)(P)(Q) & (R) of the contract agreement. This document was filed by respondent and not by the petitioner. (xxix) 23. 11. 2018 (Annexure-A/7 of writ petition, page 215-219): - The reply to the show cause notice dated 02. 11. 2018. In between, certain technical discussions/interactions and status of work namely, (Annexure-R/14) Page 207-213, Annexure-A/5 page 214). These are taken as matters of record which can be considered at appropriate stage if necessary. (xxx) 26. 11.

2018 (Annexure-R/14 of affidavit-in-opposition, Page 220-229): - The status of work on site as on 26. 11. 2018. W. A. No. 17 of 2019 Page 12 (xxxi) 26. 11. 2018 (Annexure-R/9 of affidavit-in-opposition, Page 230-234): - The show cause notice granting 15 days time to make representation. “Summary of defaults made by the contractor in contract” is annexed as Annexure-A. (xxxii) 11. 12. 2018 (Annexure-A/9 of writ petition, page 235-249): - The reply to the show cause notice dated 26. 11. 2018 (Annexure-R/9). (xxxiii) 17. 12. 2018 (Annexure-R/13/3 of affidavit-in-opposition Page 267-274): - The detailed counter of reply by the respondent No. 3 to the contractor’s stand taken in his reply dated 23. 11. 2018 (Anexure- A/7, page 215-219). This relates to the Show Cause Notice dated 02. 11. 2018 [(Annexure-R/8 of the Affidavit-in-opposition), Sl. No. (xxviii)] (xxxiv) 21. 12.

2018 (Annexure-A/13 of the writ petition, page 277-278): - The request by the Petitioner for encashment of Bank Guarantee . (xxxv) 24. 12. 2018 (Annexure A/14 of the writ petition, page 279-290) : Termination notice i. e. , the termination of contract in terms of Article 23. 1. 2. of the Contract. (Addressed to Niraj House, Sunder Baug, Near Deoner Bus Depot, Chembur, Mumbia-400088, Maharashtra, India) (xxxvi) 24. 12. 2018 (Annexure-X2 of the additional affidavit, page 291): - The termination letter e-mailed to Contractor’s address at Imphal. [8] The two letters of the respondents dated 21. 12. 2018(Annexure- A/13), and 24. 12. 2018(Annexure-A/14), which are the subject matter of challenge in the writ petition being W. P. (C) No. 1219 of 2018, and it is pleaded as the cause for this litigation. [A] Letter dated 21. 12. 2018: - ENCASHMENT OF BANK GUARANTEE The encashment of Bank Guarantee has been made. Hence, the said letter is not reflected. W. A. No.

17 of 2019 Page 13 [B] Letter dated 24. 12. 2018:- TERMINATION OF CONTRACT( IMPUGNED) - Annexure-A/14 of Writ Petition- page 279 & 280 of new typed set. DPA-III/122/01/2018 24 December, 2018 M/s NCSL-MTDCL (JV) [Mr. Niraj Cement Structurals Ltd. In Joint Venture with M/s Manipur Tribal Development Corporation Ltd. ] Niraj House, Sunder Baug, Near Deoner Bus Depot, Chembur, Mumbia-400088, Maharashtra, India. Attn: Mr. Gulshan Chopra, Lead Member/Authorized Signatory Sub: Constructions of 69 Bridges along with Approach Roads on the Tamu- Kyigone-Kalewa road Section from Km. 0. 000 to Km. 149. 700 of Trilateral Highway in Myanmar – Termination of Contract. Ref: (i) EPC Contract Agreement dated 08 November 2017 between Ministry of External Affairs & M/s NCSL-MTDCL JV. (ii) AE letter no. IrconISL/1019/MEA/TKK/2005 dated 02. 11. 2018 (iii) Contractor’s letter no. NCSL/MTDC JV/TKK/Myanmar/101 dated 23. 11. 2018 (Received on 27. 11. 2018) (iv) Authority letter no DPA-III/122/01/2018 dated 26.

11. 2018 (v) Contractor’s letter no. Nil dated 11. 12. 2018 (vi) AE letter no. IrconISL/1019/MEA/TKK/2231 dated 20. 12. 2018 Sir, With reference to above captioned priority Government of India’s project in Myanmar, fifteen (15) days notice for termination of contract was served to Contractor vide this office letter no. DPA-III/122/01/2018 dated 26 November 2018 pursuant to Contractor’s repeated failures since signing of EPC Agreement on 08 November 2017. 2. After reviewing the facts stated in show cause notice issued by Authority’s Engineer, 15 days termination notice issued by Authority, your replies and response of Authority’s Engineer there upon (enclosed) and all the facts, the Authority has decided to terminate the EPC Contract for the construction of 69 Bridges along with approach roads on the Tamu-Kyigone-Kalewa road Section from Km. 0. 000 to Km. 149. 700 of Trilateral Highway in Myanmar. 3.

As already intimated to you, even after expiry of over 12 months period from date of commencement of works (Appointed Date), the progress of works is ‘Nil’ till date. You have inter alia, failed to mobilize fully at site, pre construction activities have not been completed, designs & drawings complying with the requirements of Contract has not been submitted and despite continuous and close monitoring & reviewing by all stakeholders, you have failed to cure the defaults/failures within the cure period. You have failed to achieve Project Milestone-I and II, as well as failed to proceed in accordance with clause 10. 1 of the contract. Further, you have failed to ensure availability of Lead member as per contract, to execute the diversion works, not registering the JV in Myanmar in the correct JV share as per contract, stating incorrect JV share as per agreement, been slow to mobilise requisite manpower and equipment and delayed setting up of camps. 4.

The numerous defaults and failures with respect to this contract have been informed to you on multiple occasions and ample opportunity has been W. A. No. 17 of 2019 Page 14 given to correct the defaults and put the project implementation back on track. Despite it and despite repetated reminders and notices, no progress of works and no satisfactory action have been taken by you. You have even failed to adhere to your submitted schedules or plans. Resultantly, owing to your continuous failures, this project of great public and international importance for the country taken up pursuant to a bilateral commitment of the Government of India to Government of Myanmar has been adversely affected. 5. In view of the above, please take notice that the contract stands terminated in terms of clause no. 23. 1. 2 thereof. Be informed that the balance works under the contract shall now be carried out independently without your participation and at your risk and cost.

You as well as every member of JV individually or as a partnership firm/JV shall be debarred from participation in the tender process for executing the balance works. The performance security submitted by you shall also be encashed and the amount shall stand forfeited. Yours sincerely Sd/- (Namgya Khampa) Encls: Response of Authority’s Engineer to Authority (MEA) No. IrconISL/ 1019 / MEA/TKK/2231 dated 20 December, 2018 [Enclosure to Annexure-R/14 of the Writ Petition Page 281-290 (10 Pages) – list of defects: ] [Pages : 281-290 of New Typed set] [9] Challenging the above communications, the appellant/petitioner rushed to this Court for the following reliefs : “ii) issue a writ of certiorari for quashing and setting aside the impugned termination letter dt. 24-12-2018 (Annexure-A/14) and letter dt. 21-12-2018 (Annexure-A/13). iii) direct the respondent No. 1 to cause investigation into the practical viability of the DPR prepared by respondent No.

3 for execution of the project and fix responsibility; iv) in the interim, stay or suspend the operation of the impugned termination letter dt. 24-12-2018 (Annexure-A/14) and letter dt. 21-12-2018 (Annexure- A/13). ” [10] In the writ petition, notice to the respondents was ordered and an interim order was passed. The respondents inter alia raised a preliminary objection on the maintainability of the writ petition filed before the High Court of W. A. No. 17 of 2019 Page 15 Manipur stating that it is contrary to the terms of the EPC agreement signed between the appellant/petitioner and the respondent authorities. Suppression of facts was also pleaded. In this regard, an affidavit of objection dated 14. 01. 2019 was filed by respondent No. 1, 2, 3 & 4.

The relevant Articles of the Agreement which has been highlighted by the respondents to challenge the writ petition on maintainability along with the legal and factual plea has been summarized by the Single Judge in paragraph 4 of the judgment & order dated 29. 03. 2019 which reads as follows:- “[4] An affidavit-in-opposition on behalf of respondents was filed raising a preliminary objection as regards the maintainability of the writ petition praying that the writ petition should not be entertained by this Court and that it should be quashed as per the EPC agreement signed between the authority and the petitioner. As seen from the affidavit, there are three main grounds on the basis of which the issue of maintainability was raised by them. Firstly, the Hon’ble Courts in Delhi have got the exclusive jurisdiction to adjudicate the issue involved herein as per article 27.

1 of the Contract Agreement and in view of the said article, this Court is not the appropriate court having the territorial jurisdiction to entertain the writ petition. Article 27. 1 reads as under; “27. 1. This agreement shall be construed and interpreted in accordance with and governed by the laws of India, and the Courts at Delhi shall have exclusive jurisdiction over matters arising out of or relating to this Agreement. ” Secondly, it is settled law that the disputes relating to the contract and its terms, cannot be agitated in a writ petition. This court is not the appropriate forum to adjudicate commercial disputes. Moreover, there exist an arbitration clause/ provision in the agreement for adjudication of the dispute. Thus, the Petitioner has got an alternate and efficacious remedy as per Article 26 of the EPC agreement.

Since the petitioner has got efficacious remedy under Arbitration and Conciliation Act 1996, no injunction can be granted under Section 41(h) of the Specific Relief Act, 1963. The relevant clauses read as under. “26. 3. 1 Any Dispute which is not resolved amicably by conciliation, as provided in Clause 26. 2 shall be finally decided by reference to arbitration in accordance with the rules of arbitration of the SOCIETY FOR AFFORDABLE REDRESSAL OF DISPUTES (SAROD). 26. 3. 3 The arbitrators shall make a reasoned award (the “Award”). Any Award made in any arbitration held pursuant to this Article 26 shall be final and binding on the Parties as from the date it is made, and the Contractor and the Authority agree and undertake to carry such Award without delay. 26. 3. 4 The Contractor and the Authority agree that an Award may be enforced against the Contractor and/or the Authority; as the case may be, and their respective assets whatever situated.

” Thirdly, no relief as prayed for by the petitioner in its writ petition can be granted under Section 14 read with Section 20 A of the Specific Relief W. A. No. 17 of 2019 Page 16 Act, 1963. Section 14 and 20 A of the Specific Relief Act, 1963 reads as under: “Section 14 of the Specific Relief Act, 1963 Contracts not Specifically Enforceable-The following contracts cannot be specifically enforced namely:- (a) Where a party to the contract has obtained substituted performance of the contract in accordance with the provisions of Section 20. (b) A contract, the performance of which involves the performance of a continuous duty which the court cannot supervise; (c) A contract which is so dependent on the personal qualifications of the parties that the court cannot enforce specific performance of its material terms; and (d) A contract which is in its nature determinable.

“Section 20A of the Specific Relief Act, 1963 Specific provisions for contract relating to infrastructure project- (1) No injunction shall be granted by a court in a suit under this Act involving a contract relating to an infrastructure project specified in the schedule, where granting injunction would cause impediment or delay in the progress or completion of such infrastructure project. Explanation:- for the purpose of this section and section 20-B and clause (ha) of section 41, the expression “infrastructure project” means the category of projects and infrastructure sub-sectors specified in the Schedule. ” [11] In response to respondents’ affidavit-in-opposition dated 14. 01. 2019, the petitioner filed a rejoinder affidavit on 30. 01. 2019. Para 4 of the writ petitioner’s rejoinder affidavit which is relevant for this case reads as follows : “4.

That, with reference to para 2 of the affidavit-in-opposition, deponent submits that even though Court at Delhi had exclusive jurisdiction over matters arising out of or relating to the Agreement, deponent was compelled to approach the Hon’ble High Court of Manipur as the impugned termination letter dt. 24-12-2018 and letter dt-21-12-2018 was issued during the vacation of the Delhi High Court in malafide and there was a vacation Bench of this Court on 28-12-2018 considering the urgency for restraining the respondents from giving effect to the impugned termination letter which has violated valuable fundamental and other Constitutional rights of the deponent, the above referred writ petition was filed invoking extra ordinary jurisdiction of this Hon’ble Court under Article 226 of the Constitution of India. Further, it is stated that the Constitution of India is Suprema Lex. The jurisdiction of the Constitution of India is sacrosanct. It is an extra ordinary jurisdiction.

This jurisdiction under Article 226 of the constitution of India cannot be circumvented by an agreement or by any statute overriding the Constitutional provision. The Courts referred in the Agreement would apply to civil courts or tribunals exercising jurisdiction provided by Statute and would not extend to W. A. No. 17 of 2019 Page 17 Constitutional remedy. Even statute cannot abrogate the jurisdiction of this Court under Article 226 of the Constitution of India, much less an agreement by the parties. ” (emphasis supplied) [12] Thereafter, the writ petitioner filed an additional affidavit dated 06. 03. 2019. This was filed in view of the specific objection taken in the reply affidavit dated 14. 01. 2019 filed by respondent No. 1, 2, 3 & 4 on maintainability of the writ petition and on merits as well, pleading that no cause of action arose within the jurisdiction of this Court. Para Nos.

2, 3, 4, 5 & 6 of the additional affidavit of the appellant/petitioner dated 06/03/2019 read as follows:- “2. That, deponent begs to state that letter of acceptance for award of contract in question was received by the petitioner via e-mail at the office of the Manipur Tribal Development Corporation Ltd. Merely because the Government of India has issued the termination letter dated 24. 12. 2018 at Delhi would not ipso facto give territorial jurisdiction to Delhi Court although this letter has not been communicated to the petitioner at Delhi and has in fact been communicated to the petitioner at MTDC Office at Imphal. Annexure-X1 and X/2 are the true and correct copy of the letter of Acceptance and E-mail receipt about the communication of the termination order, 3.

That, the Hon’ble Supreme Court in a catena of cases has held that unless and until an order is communicated to a person, the order does not culminate into an executable order and that the decision becomes the decision only when it is communicated to the concerned person. A cause of action in law means that an enforceable right in law accrues. When a right accrues simultaneously a liability also arises against a person. If an enforceable right arises only on communication of the order, then, a cause of action arises and is complete only when the communication of the order to the person concerned is complete. Therefore, in the present case, the cause of action arose at Imphal when the termination letter dt. 24-12-2018 was received at Imphal. 4. That, it is also a fact that one part of the Bridge No. 1 of the contract falls in the State of Manipur and as such, some part of cause of action can be said to have arisen in the State of Manipur.

Therefore, since the termination of the contract also included the Bridge No. 1, the termination can be challenged in Imphal. 5. That, it is stated that the Bank guarantee for performance of contract in question was also furnished in the Punjab National Bank, W. A. No. 17 of 2019 Page 18 Thangal Bazar, Imphal. Therefore, the petition challenging the termination order and the letter for withdrawal or encashment of the BG issued by the Bank from Imphal is maintainable before the Hon’ble High Court of Manipur. Moreover, all the activities including all communications are made from Imphal and no part of the execution of the contract is done at Delhi or Mumbai, therefore, Hon’ble High Court of Manipur has jurisdiction to entertain the writ jurisdiction. 6. That, it is also a fact that the petitioner is a Joint Venture and Manipur Tribal Development Corporation Ltd. Has 30% of the share.

All the works relating to the execution of the contract are mainly performed from the office of the MTDC Ltd. at Imphal being closer to Myanmar and no work relating to the contract is performed or executed at Delhi or Mumbai and as such, the cause of action arises at Imphal which is well within the territorial jurisdiction of this Hon’ble Court. ” (Emphasis supplied) This is the writ petitioner’s plea on cause of action after the writ petition was taken on file and an interim order granted earlier on 29. 12. 2019. [13] In the writ petition, interim protection against the letter seeking encashment of bank guarantee as well as the termination notice dated 24. 12. 2018 was sought. On 29. 12. 2018, the termination notice dated 24. 12. 2018 was suspended and in so far the performance security is concerned, it was ordered that if it was already encashed, the order will have no application in relation to encashment.

This interim order of the Single Judge was in force till dismissal of the writ petition. [14] Since the issue of maintainability of the writ petition was agitated, the Court proceeded on one issue namely, whether cause of action wholly or in part arose within the territorial jurisdiction of this Court. [15] The learned Single Judge while considering the various plea as above and the scope of Article 226 of the Constitution by referring to various W. A. No. 17 of 2019 Page 19 decisions of the Hon’ble Supreme Court refrained from forming any opinion on the plea of arbitrariness in the termination of the Contract, violation of Article 23. 1. 2 of the agreement, the provisions of Specific Relief Act, supersession of facts, disputed question of fact, etc. The Court however, rendered a finding only on the respondents’ plea of no cause of action and dismissed the writ petition.

The learned Single Judge on cause of action ruled as follows:- “[11] On perusal of the decisions relied upon by the counsel appearing for the parties, it is seen that the question whether or not the cause of action wholly or in part has arisen within the territorial limits of any High Court, has to be decided in the light of the nature and character of the proceedings under Article 226 of the Constitution. Cause of action means every fact which is required to be proved by the plaintiff in order to support his right to the judgment. Whether a particular fact constitutes a cause of action or not must be decided on the basis of the facts and circumstances of each case. In order to constitute a part of cause of action, such fact ought to constitute a material, essential or integral part of cause of action.

In the present case, it is not in dispute that a tender was floated vide NIT dated 03-04-2017 issued by IRCON, New Delhi for construction of 69 brides, along with approach roads, on Tamu- Kyigone- Kalewa Road in the territory of Myanmar. After the bids being opened, a letter of acceptance dated 16-10-2017 was issued in favour of the petitioner. An EPC was made on 08-11-2017 in New Delhi between the Ministry of External Affairs, Government of India, New Delhi, through its Joint Secretary and the petitioner. The right of way was handed over to the contractor on 10-11-2017 and the commencement date of the project was finalized as 28-11-2017 after submission of requisite performance bank guarantee by the contractor as per terms of the contract. The total period of construction as per the contract is 36 months from the date of commencement.

A show cause notice dated 11- 05-2018 was served upon the petitioner stating that the requisite steps were not taken by the petitioner to execute the work expeditiously; that there were failures to comply with the conditions and instructions and that there was no recognizable mobilization and planning to meet the contractual obligations. On 21-05-2018, the petitioner wrote a letter informing that there were some mismatching in the topographic survey done for bridge-I and also while conducting the measurements of coordinates. Being not satisfied with the reply, a notice of 15 days dated 18-06-2018 for termination of contract was issued to the petitioner as to why the authority should not proceed to terminate the contract, followed by a meeting held 25-06-2018 whereby the petitioner was required to submit a detailed three months working plan.

After the expiry of three months, a cause notice dated 02-11-2018 was served on the petitioner on the allegation that the petitioner failed to comply with the notice/ reminders thereby showing no adequate progress of work and rectification of defaults. A reply dated 23-11-2018 was submitted by the W. A. No. 17 of 2019 Page 20 petitioner which was received on 27-11-2018 and by then, the respondent had already issued a notice of 15 days dated 26-11-2018 pursuant to contractor’s repeated failures. On 21-12-2018 a letter was addressed to the Manager, Punjab National Bank with a request to encash the bank guarantees on the ground that the petitioner has committed default in the due and faithful performance of its obligations under and in accordance with the agreement. The contract was terminated vide letter dated 24-12-2018 issued by the Joint Secretary, Ministry of External Affairs, Government of India.

From the aforesaid facts, it is seen that not even a part of cause of action has arisen within the territorial limits of this court. The NIT was issued in Delhi; the agreement was signed in Delhi and the work is to be executed in Myanmar. The offices of the respondents are located in Delhi from where the letters/ notices are sent by the respondents. The mere fact that e-mail is, either sent from or received at Imphal, will not constitute a part of the cause of action because it is neither a material, essential nor an integral part of the cause of action, as has been held by the Hon‟ble Supreme Court in ONGC Vs. Utpal Kumar Basu case. In other words, there is no any fact, as contended by the counsel appearing for the petitioner, which can be said to be a material, essential or integral part constituting a part of cause of action.

Considering the overall facts and circumstances of the present case, this court is of the view that the instant writ petition is not maintainable for want of jurisdiction of this court and therefore, there is no need of considering the other grounds. [12] For the reasons stated hereinabove, the instant writ petition is dismissed as not maintainable, with no order as to costs and the interim order granted by this court stands vacated. It is open to the petitioner to approach the appropriate forum for redressal of its grievances in accordance with law. ” [16] The interim order granted by the Court was vacated and liberty was granted to the petitioner/appellant to approach the appropriate forum. As a result, the present writ appeal has been filed by the unsuccessful writ petitioner. In the course of hearing of the appeal, the appellant, inter-alia, pleaded arbitrariness and violation of mandatory provision of Article 23. 1.

2 as the cause for filing the writ petition and also pleaded part of cause of action arose within the jurisdiction of this Court. The appellant refers to the Article 23. 1. 2 of the agreement and pleads that its mandatory clause is violated. Once appellant/writ petitioner pitches on one clause/Article of the Agreement, he will be naturally bound by other clauses/Articles of the W. A. No. 17 of 2019 Page 21 Agreement unless he pleads otherwise. It does not appear to be so. Appellant’s counsel pointed out errors in the Detailed Project Report- DPR/Feasibility Report, from writ documents and on the basis of documents contained in the reply affidavit of Respondents No. 1 to 4 dated 14. 01. 2019. They are annexure R/1 to R/17. The respondents while primarily pleading on the preliminary objection and maintainability of the writ petition referred to the various Articles of the Agreement, documents like review meetings, show cause notices, etc.

to state that there was no arbitrariness in the respondents’ approach in so far termination is concerned. It was specifically pleaded in para No. 28 of the reply affidavit that there is no breach of Article 23. 1. 2. The repeated and series of correspondences were highlighted to show that Appellant did not show any progress and therefore, several show cause notices were issued and despite reply and undertaking to start work, no progress was shown or made. Finally, respondents were forced to take a call for termination. In the light of the pleadings submitted both on preliminary issue and on the merits, we are inclined to address all the issue appropriately and render a decision peremptorily as indicated by the Hon’ble Supreme Court. [17] We shall first address the issue raised by the appellant /writ petitioner when he approached the writ court for the relief of setting aside the impugned order dated 24. 12. 2018 (Annexure-A/14) of the writ petition.

[18] The appellant /writ petitioner who was awarded the contract for construction of 69 Bridges including the approach roads on the Tamu- Kyigone-Kalewa Road (TKK) for short, suffered termination of the contract W. A. No. 17 of 2019 Page 22 by impugned proceeding dated 24. 11. 2018 (Annexure-A/14). According to the writ petitioner, it is contrary to Article 23. 1. 2 of the agreement dated 08. 11. 2017 (Annexure-A/3, Page 3-14 in the new typed set). Article 23 relating to termination becomes very relevant and appropriate because the appellant / writ petitioner invokes this clause of the Agreement to challenge the action of the respondents in the termination of the contract pleading that it is contrary to Article 23. 1. 2 and that respondents have not followed the mandatory provision of Article 23. 1. 2. Hence, it is an arbitrary action.

The respondents without taking note of the work done by the appellant, have arbitrarily exercised such power to victimize the contractor for no fault of his. This plea of the petitioner has been explicitly stated in para 10, 14 & 15 of the writ petition, which read as follows :- [10] That, it is stated that while issuing the show cause notice, the Authority has not followed clause 23. 1. 2, whereunder it is provided that the Authority shall be entitled to terminate this Agreement by issuing a Termination Notice to the Contractor, provided that before issuing the Termination Notice, the Authority shall by a notice inform the Contractor of its intention to issue such Termination Notice and grant 15 (Fifteen) days to the Contractor to make a representation, and may after the expiry of such 15(Fifteen) days, whether or not it is in receipt of such representation, issue the Termination Notice.

Prior to the issuance of show cause notice for termination of contract, no notice was served informing the contractor of its intention to issue termination notice by granting 15 days time to make a representation by the Authority. Therefore, the show cause for termination of contract as well as the termination of contract is not sustainable in the eyes of law as the same has been issued without following the mandatory provision of clause 23. 1. 2 referred above. ” [14] That, it is respectfully submitted that so far 70% of the survey and setting up of reference pillars has been completed and therefore, it may not be proper to terminate the contract and appoint a new contractor who in turn has to start the survey and other works afresh from the beginning which will not be feasible for early completion of the work. From the very beginning, contractor has been furnishing monthly Progress Report.

Therefore, terminating a contract without affording timely cooperation and appointing new contractor will amount to arbitrary exercise of power to victimize the contractor for no fault of it. W. A. No. 17 of 2019 Page 23 [15] That, it is respectfully submitted that it is settled principle of law that an act required to be done in a particular manner should be done in that manner or the act should not be done in any other manner. In the present case, the show cause notice for termination of contract was not preceded by a notice informing about the intention to issue show cause for termination. ( emphasis supplied) This has been denied by the respondent No. 1 to 4 in their affidavit-in-opposition dated 14. 01. 2019 and replied in Para 28 as follows:- “[28] That, with reference to the averment made in para No. 10 of the writ petition, the respondents denied the whole allegation stated therein. It is submitted that the Respondents have followed the clause 23. 1. 2 and under the clause 23.

1. 2 of the agreement, 15 days’ time to petitioner was given before serving termination letter as evident from the 15 days’ notice of termination issued on dated 26. 11. 2018 as placed at Annexure-R/9 and Termination Letter issued on 24. 12. 2018 as placed at Annexure-R/10. Thus, there is no fault on the part of the Respondents in passing termination order of the EPC Contract. Therefore, the allegations of the petitioner is false, misleading and incorrect and hence, liable to quash on this count alone. ” [19] In the light of pleadings of appellant and respondents No. 1 to 4 as above, the first issue is whether there was violation of the mandatory provision of Article 23. 1. 2 of the EPC agreement and further did the respondents act in an arbitrary manner and cancel the contract and victimize the contractor/appellant. Article 23. 1. 1 and 23. 1. 2 read as follows:- “Article 23. 1 Termination for Contractor Default Article 23. 1. 1 23. 1.

1 Save as otherwise provided in this Agreement, in the event that any of the defaults specified below shall have occurred, and the Contractor fails to cure the default within the Cure Period set forth below, or where no Cure Period is specified, then within a Cure Period of 60 (sixty) days, the Contractor shall be deemed to be in default of this Agreement (the “Contractor Default”), unless the default has occurred solely as a result of any breach of this Agreement by the Authority or due to Force Majeure. The defaults referred to herein shall include: (a) the Contractor fails to provide, extend or replenish, as the case may be, the Performance Security in accordance with this Agreement; (b) subsequent to the replenishment or furnishing of fresh Performance Security in accordance with Clause 7. 3, the Contractor fails to cure, W. A. No.

17 of 2019 Page 24 within a Cure Period of 30 (thirty) days, the Contractor Default for which the whole or part of the Performance Security was appropriated; (c) the Contractor does not achieve the latest outstanding Project Milestone due in accordance with the provisions of Schedule-J, subject to any Time Extension, and continues to be in default for 45 (forty five) days; (d) the Contractor abandons or manifests intention to abandon the construction or Maintenance of the Project without the prior written consent of the Authority; (e) the Contractor fails to proceed with the Works in accordance with the provisions of Clause 10.

1 or stops Works and/or the Maintenance for 30 (thirty) days without reflecting the same in the current programme and such stoppage has not been authorised by the Authority’s Engineer; (f) the Project Completion Date does not occur within the period specified in Schedule-J for the Scheduled Completion Date, or any extension thereof; (g) failure to complete the Punch List items within the periods stipulated therefore in Clause 12. 2.

1; (h) the Contractor fails to rectify any Defect, the non rectification of which shall have a Material Adverse Effect on the Project, within the time specified in this Agreement or as directed by the Authority’s Engineer; (i) the Contractor subcontracts the Works or any part thereof in violation of this Agreement or assigns any part of the Works or the Maintenance without the prior approval of the Authority; (j) the Contractor creates any Encumbrance in breach of this Agreement; (k) an execution levied on any of the assets of the Contractor has caused a Material Adverse Effect ; (l) the Contractor is adjudged bankrupt or insolvent, or if a trustee or receiver is appointed for the Contractor or for the whole or material part of its assets that has a material bearing on the Project; (m) the Contractor has been, or is in the process of being liquidated, dissolved, wound-up, amalgamated or reconstituted in a manner that would cause, in the reasonable opinion of the Authority, a Material Adverse Effect; (n) a resolution for winding up of the Contractor is passed, or any petition for winding up of the Contractor is admitted by a court of competent jurisdiction and a provisional liquidator or receiver is appointed and such order has not been set aside within 90 (ninety) days of the date thereof or the Contractor is ordered to be wound up by court except for the purpose of amalgamation or reconstruction; provided that, as part of such amalgamation or reconstruction, the entire property, assets and undertaking of the Contractor are transferred to the amalgamated or reconstructed entity and that the amalgamated or reconstructed entity has unconditionally assumed the obligations of the Contractor under this Agreement; and provided that: (i) the amalgamated or reconstructed entity has the capability and experience necessary for the performance of its obligations under this Agreement; and (ii) the amalgamated or reconstructed entity has the financial standing to perform its obligations under this Agreement and has a credit worthiness at least as good as that of the Contractor as at the Appointed Date; W.

A. No. 17 of 2019 Page 25 (o) any representation or warranty of the Contractor herein contained which is, as of the date hereof, found to be materially false or the Contractor is at any time hereafter found to be in breach thereof; (p) the Contractor submits to the Authority any statement, notice or other document, in written or electronic form, which has a material effect on the Authority’s rights, obligations or interests and which is false in material particulars; (q) the Contractor has failed to fulfill any obligation, for which failure Termination has been specified in this Agreement; or (r) the Contractor commits a default in complying with any other provision of this Agreement if such a default causes a Material Adverse Effect on the Project or on the Authority. Article 23. 1. 2 23. 1.

2 Without prejudice to any other rights or remedies which the Authority may have under this Agreement, upon occurrence of a Contractor Default, the Authority shall be entitled to terminate this Agreement by issuing a Termination Notice to the Contractor; provided that before issuing the Termination Notice, the Authority shall by a notice inform the Contractor of its intention to issue such Termination Notice and grant 15 (fifteen) days to the Contractor to make a representation, and may after the expiry of such 15 (fifteen) days, whether or not it is in receipt of such representation, issue the Termination Notice. ” Appellant’s plea is that the above Article is violated as stated in para No. 10 of the writ petition extracted in para No. 18 of this order. Referring to Article 23. 1. 1 which deals with the defaults, it is pointed out by Ms.

Madhavi Diwan, learned ASG that several show cause notices were issued with annexures setting out in details the default committed by the contractor in violation of the conditions, specifications, timeline specified in various Articles of the Agreement dated 08. 11. 2017. The show cause notices are (a) Annexure-R/5 dated 11. 05. 2018, (b) Annexure- R/6 dated 18. 06. 2018 (c) Annexure-R/8 dated 02. 11. 2018, and (d) Annexure- R/9 dated 26. 11. 2018. The contractor filed reply to some in time and others belatedly. The imputation as could be seen from the show cause notices and reminders is that the defaults, (i. e. ) non-compliance of various Articles of the Agreement are numerous and very adversely impacting the project which is W. A. No. 17 of 2019 Page 26 of great importance between Republic of India and Republic of the Union of Myanmar. She pleaded that in view of prolonged inaction and non starter, Article 23. 1. 2 was invoked and it became inevitable.

The procedure has been followed as required and there is no question of violation of the said Article and consequently, no arbitrariness. [20] Article 23. 1. 2 provides that the authority, Ministry of Home Affairs, Government of India, without prejudice to other rights or remedies under Agreement dated 08. 11. 2017 in a case of default by the contractor, will be entitled to terminate the agreement by issuing a termination notice. Provided before issuing the termination notice as above, the authority shall by way of a notice inform the contractor of its intention to issue such termination notice and grant 15 days to the contractor to make a representation. It further provides that the authority may, after expiry of such 15 days, whether or not it is in receipt of a representation by the contractor, issue a termination notice. In this case, as observed earlier, 15 days notice dated 26. 11. 2018 (Annexure-R/9 of the Affidavit-in-opposition and A/8 of the writ petition) was issued.

Thereafter, a reply was filed by the appellant contractor on 11. 12. 2018 (Annexure-A/9). Thereafter, the agreement is terminated by termination notice dated 24. 11. 2018(Annexure-A/14) which is the impugned in the writ petition. [21] Article 23. 1. 2 speaks of two stages. In the event of the authority deciding to terminate the agreement, the authority has to:- W. A. No. 17 of 2019 Page 27 (a) Issue the first notice indicating the authority’s intention to terminate the agreement. In this notice, 15 days time is to be given to the contractor with an opportunity to reply to the notice. (b) If a reply is submitted within 15 days of first notice or no reply is received, then the authority may proceed to terminate the agreement by way of termination notice. If not satisfied. This appears to be the plain and simple intent behind Article 23. 1. 2. If both the steps are complied, then the requirement of Article 23. 1. 2 is complete. Nothing more is required or contemplated.

[22] The appellant’s plea appears to be that there should be a first notice and after receiving reply, the second notice should be issued and only thereafter, the contract can be terminated by another order. Prima-facie, this appears to be a misconception and misreading of Article 23. 1. 2 of the Agreement. The key words are termination by issuing the termination notice. However, before issuing the termination notice, the authority is bound to give a 15 days’ notice simpliciter informing the contractor of the authorities’ intention to terminate the Agreement. Thereafter, subject to reply, the authority can issue the termination notice in relation to the Agreement. There is no requirement for passing any further order. The termination notice is final. The word termination notice is really the termination of the contract. No other construction is possible.

This has been apparently misconstrued by the appellant/writ petitioner, and probably lead him to plead that the mandatory provision has not been followed. Therefore, prima facie this appears to be W. A. No. 17 of 2019 Page 28 the misconception on the part of the appellant/writ petitioner. The language and meaning of Article 23. 1. 2 has to be understood on its plain terms and intent. We, therefore, prima facie hold that Article23. 1. 2 was not breached by respondents No. 1 and 2 and the said plea is rejected. [23] The plea of violation of mandatory provision of Article 23. 1. 2 appears to be inherently misconceived interpretation but the appellant / writ petitioner has invited himself to its interpretation in a petition of Article 226 of the Constitution leaving us no choice but to render a ruling on it. In any event, the appellant can freely make such submission before the competent forum as provided in the agreement.

Needless to state that in the earlier show cause notice details of the inaction, delay, lethargy in execution of the contract has been highlighted extensively. In fact, the appellant/writ petitioner has also replied to the earlier show cause notice. It is, therefore, clear that the final decision of issuing the termination notice dated 24. 11. 2018 was not taken in haste or in an arbitrary manner. The number of notices, review meetings, clarifications given by the respondents makes it amply clear that they have cautioned the appellant time and again to take steps to complete the project. However, the appellant has been taking a stand that the DPR/Feasibility Report itself is inherently at fault and several other data are erroneous and incorrect. On this, we will address in the later part of the judgment. Since the authority has proceeded in the terms of the articles of the agreement, the appellant’s plea for interference by invoking Article 226 appears to be a misplaced.

This Court would not have ventured into the interpretation of Article of the agreement as above but we were forced to rule on the above as Appellant invoked the plea of Fundamental Rights and arbitrariness vehemently on the basis of Article 23. 1. 2 of the Agreement. The W. A. No. 17 of 2019 Page 29 respondents also denied such allegations with equal proportion. We are conscious of the fact that writ Courts normally does not enter into the arena of interpretation of the terms of contract. In M/s Radhakrishna Agarwal and Others Vs. State of Bihar and Others: (1997) 3 SCC 457. In Kerala State Electricity Board and Another Vs. Kurien E. Kalathil and Others: (2000) 6 SCC 293, the Hon’ble Supreme Court was of the view that interpretation and implementation of a clause in the contract cannot be subject matter of a writ petition.

It further held that the fact that one of the parties to the agreement is a statutory or public body will not by itself affect the principles to be applied, namely, principles of law of contract. The contract between the parties is; in the realm of private law. It is not statutory contract. The disputes relating to interpretation of the terms and conditions of such a contract could not have been agitated in a petition under Article 226 of the Constitution of India. That is a matter for adjudication by a civil court or in arbitration if provided for in the contract. In Joshi Technologies International Inc. vs. Union of India: (2015) 7 SCC 728, certain principles have been laid in this regard in para 69. It however, does not enure to the cause of the appellant. The appellant/writ petitioner relied heavily on the case of Maharashtra Chess Association Vs. Union of India; & Ors. : Civil Appeal No. 5654 of 2019 @ Special Leave Petition (C) No.

29040 of 2018 to plead arbitrariness and that respondents’ action is in violation of fundamental rights, hence, Article 226 can be invoked. The senior counsel pleads that in the scope of project, there are defects, errors in the data. The arbitrariness in the respondents conduct of termination of the Agreement to protect the defective survey and data provided in the feasibility report/DPR is apparent. W. A. No. 17 of 2019 Page 30 Therefore, this Court should consider all factors holistically as adumbrated by the Supreme Court in the Maharashtra Chess Association case (Supra). [24] A reasonable sequitur to the above conclusion is that the appellant who primarily pitched the writ petition on the interpretation of Article 23. 1. 2 of the Agreement cannot resile from the other parts of the agreement particularly the article relating to ouster of jurisdiction of the courts in case of dispute and article relating to arbitration.

Before we proceed further in the matter on the applicability of the various articles of the agreement, it is trite that a contract or an agreement should be read as a whole. If a party relies upon one part of the agreement, such party is equally bound by the other parts of the agreement unless there is an intention to the contrary. In a recent decision of the Hon’ble Supreme Court in Hammad Ahmed vs. Abdul Majeed & ors. reported in (2019) 14 SCC 1, the principle of interpretation on a document was analysed in the following manner at para No. 45:- “45. The well-known principle of interpretation of document is that one line cannot be taken out of context. It is a cumulative reading of entire document which would lead to one conclusion or the other. Some of the judgments relevant for determining as to the principle of interpretation of documents are delineated hereinafter. One of the judgments relating to the interpretation of documents is Delhi Development Authority v.

Durga Chand Kaushish : (1973) 2 SCC 825. It was held that the meaning of the document or of a particular part of it is to be sought for in the document itself. The Court held as under:- “19. Both sides have relied upon certain passages in Odgers' “Construction of Deeds and Statutes” (5th ed. 1967). There (at pages 28-29), the First General Rule of Interpretation formulated is: “The meaning of the document or of a particular part of it is therefore to be sought for in the document itself”. That is, undoubtedly, the primary rule of construction to which Sections 90 to 94 of the Indian Evidence Act give statutory recognition and effect, with certain exceptions contained in Sections 95 to 98 of the Act. Of course, “the document” means “the document” read as a whole and not piecemeal. 20. The rule stated above follows logically from the Literal Rule of Construction which, unless its application produces absurd W. A. No. 17 of 2019 Page 31 results, must be resorted to first.

This is clear from the following passages cited in Odgers' short book under the First Rule of Interpretation set out above: *** *** *** *** *** ***” Similarly, in the Export Credit Guarantee Corpn. Of India Ltd. vs. Garg Sons International reported in (2014) 1 SCC 686, Hon’ble Supreme Court held that contract must be read as a whole and every attempt should be made to harmonize the terms thereof keeping in mind the rule of contra proferentem. “9. *** *** *** The contract must be read as a whole and every attempt should be made to harmonize the terms thereof, keeping in mind that the rule of contra proferentem does not apply in case of commercial contract, for the reason that a clause in a commercial contract is bilateral and has mutually been agreed upon. ” In Administrator of the Specified Undertaking of the Unit Trust of India & ors. vs. Garware Polyester Ltd.

reported in (2015) 10 SCC 682, the Hon’ble Supreme Court followed the case of Delhi Development Authority’s case to reiterate this position. The Hon’ble Supreme Court in the case of P. K. Mohan Ram vs. B. N. Ananthachary & ors. reported in (2010) 4 SCC 161 held that on a general principle, document should be read as a whole. In the light of the above, the writ petitioner having relied upon Article 4. 1. 2 and Article 6. 1 in the writ petition, in the subsequent hearing before this Court in this appeal upon other articles of the agreement, it is clear that appellant falls back on some Articles of the agreement dated 8. 11. 2017 to plead arbitrariness in the issue of the termination order. If that W. A. No. 17 of 2019 Page 32 be so, the entire Agreement dated 8. 11. 2017 and other clauses namely, Articles of the agreement will have to be equally applied to consider whether a case has been made out by the petitioner to invoke writ jurisdiction of this Court.

This will be in line with the decision of the Hon’ble Supreme Court in Maharashtra Chess Association case (supra). We now proceed to consider the maintainability of writ petition which is being argued by the respondents’ counsel and refuted by appellant. OUSTER CLAUSE ON JURISDICTION [25] In response to the writ petition, a detailed affidavit-in-opposition was filed by respondent No. 1, 2, 3 & 4 on 14. 01. 2019 raising the following preliminary objections : The first one relates to Article 27. 1 of the Agreement which provides that the Agreement should be construed and interpreted in accordance with and governed by the laws of India, and the Courts at Delhi shall have exclusive jurisdiction over the matters arising out of or relating to this Agreement. Therefore, the appellant/writ petitioner knocking the writ court at High Court of Manipur is in violation of this Article 27. 1 and it reads as follows :- “27.

1 Governing law and jurisdiction This Agreement shall be construed and interpreted in accordance with and governed by the laws of India, and the Courts at Delhi shall have exclusive jurisdiction over matters arising out of or relating to this Agreement. ” It is a specific plea of the respondents that in terms of the above Article, both the appellant and respondents had consciously agreed to confer jurisdiction on the Courts at Delhi. However, Para 4 of the rejoinder affidavit dated 30. 01. 2019 filed by the writ petitioner, states as follows :- W. A. No. 17 of 2019 Page 33 “4. That, with reference to para 2 of the affidavit-in–opposition, deponent submits that even though Court at Delhi had exclusive jurisdiction over matters arising out of or relating to the Agreement deponent was compelled to approach the Hon’ble High Court of Manipur as the impugned termination letter dt. 24-12-2018 and letter dt.

21-12- 2018 was issued during the vacation of the Delhi High Court in malafide and there was a vacation Bench of his Court on 28-12-2018 considering the urgency for restraining the respondents form giving effect to the impugned termination letter which has violated valuable fundamental and other Constitutional rights of the deponent, the above referred writ petition was filed invoking extraordinary jurisdiction of this Hon’ble Court under Article 226 of the Constitution of India. Further, it is stated that the Constitution of India is Suprema Lex. The jurisdiction of the Constitution of India is sacrosanct. It is an extraordinary jurisdiction. This jurisdiction under Article 226 of the Constitution of India cannot be circumvented by an agreement or by any statute overriding the Constitutional provision. The Courts referred in the Agreement would apply to civil courts or tribunals exercising jurisdiction provided by Statute and would not extend to Constitutional remedy.

Even statute cannot abrogate the jurisdiction of this Court under Article 226 of the Constitution of India, much less an agreement by the parties. ” [26] This fact pleaded by the appellant/ writ petitioner is stated to be a clear case of forum shopping and factually incorrect pleading only to take interim protection from this Court knowing fully well that as per the Agreement (Article 27), the Courts at Delhi alone has jurisdiction. According to the respondents, this statement is incorrect because the Delhi High Court, by its notification dated 28. 12. 2018, was holding vacation Court. In this regard, the respondents refer to Annexure-E/2 of reply affidavit dated 30. 05. 2019 filed by respondent No. 1 & 2 in the writ appeal. Therefore, the pleading that the Delhi High Court was on vacation appears to be a deliberate attempt to avoid the Courts at Delhi and seek indulgence of this Court. On this fact, we have no hesitation to hold that this contention of respondent is correct. W. A.

No. 17 of 2019 Page 34 [27] Be that as it may, since it is purely commercial contract for construction of 69 Bridges and the parties are bound by the terms of the contract and both the parties are bound by the various Articles of the contract. Article 27 provides for exclusive jurisdiction of Courts in Delhi in matters arising out of or relating to the Agreement. On this issue, the Hon’ble Supreme Court has time and again held that in a commercial contract of this nature, even if two Courts have jurisdiction or likely to have overlapping jurisdiction, the parties can by the agreement confer exclusive jurisdiction on one Court. The Hon’ble Supreme Court in the case of Swastik Gases (P) Ltd. Vs. Indian Oil Corporation Ltd. ; (2013) 9 SCC 32 considered the entire gamut of cases and held that conferring jurisdiction on one Court in such a contract is binding on the parties. In that case, the question that arose for consideration is as follows:- “2. The above question arises in this way.

The IBP Company Limited, which has now merged with the respondent-Indian Oil Corporation Limited, hereinafter referred to as ‘the company’, was engaged in the business of storage, distribution of petroleum products and also manufacturing and marketing of various types of lubricating oils, grease, fluid and coolants. The company was interested to promote and augment its sales of lubricants and other products and was desirous of appointing consignment agents. The appellant, M/s. Swastik Gases Private Limited, mainly deals in storage, distribution of petroleum products including lubricating oils in Rajasthan and its registered office is situated at Jaipur. An agreement was entered into between the appellant and the company on 13. 10. 2002 whereby the appellant was appointed the company’s consignment agent for marketing lubricants at Jaipur (Rajasthan). There is divergent stand of the parties in respect of the place of signing the agreement.

The company’s case is that the agreement has been signed at Kolkata while the appellant’s stand is that it was signed at Jaipur. 3. In or about November, 2003, disputes arose between the parties as huge quantity of stock of lubricants could not be sold by the appellant. The appellant requested the company to either liquidate the stock or take back the stock and make payment thereof to the appellant. The parties met several times but the disputes could not be resolved amicably. On 16. 07. 2007, the appellant sent a notice to the company claiming a sum of Rs. 18,72,332/- under diverse heads with a request to the company to W. A. No. 17 of 2019 Page 35 make payment of the above amount failing which it was stated that the appellant would pursue appropriate legal action against the company. 4. Thereafter, on 25. 08.

2008 another notice was sent by the appellant to the company invoking arbitration clause wherein name of a retired Judge of the High Court was proposed as the appellant’s arbitrator. The company was requested to name their arbitrator within thirty days failing which it was stated that the appellant would have no option but to proceed under Section 11 of the 1996 Act. The company did not nominate its arbitrator within thirty days of receipt of the notice dated 25. 08. 2008 which led to the appellant making an application under Section 11 of the 1996 Act in the Rajasthan High Court for the appointment of arbitrator in respect of the disputes arising out of the above agreement. “ 5. The company contested the application made by the appellant, inter alia, by raising a plea of lack of territorial jurisdiction of the Rajasthan High Court in the matter.

The plea of the company was that the agreement has been made subject to jurisdiction of the courts at Kolkata and, therefore, Rajasthan High Court lacks the territorial jurisdiction in dealing with the application under Section 11. ” The jurisdiction clause is contained at para No. 8 is as follows:- “8. The jurisdiction clause 18 in the agreement is as follows: “18. Jurisdiction The Agreement shall be subject to jurisdiction of the courts at Kolkata. “ [28] The contention of the appellant in Swastik Gases (P) Ltd. (supra) is at para No. 9:- “9. The contention of the learned counsel for the appellant is that even though clause 18 confers jurisdiction to entertain disputes inter se parties at Kolkata, it does not specifically bar jurisdiction of courts at Jaipur where also part of the cause of action has arisen.

It is the submission of the learned counsel that except execution of the agreement, which was done at Kolkata, though it was signed at Jaipur, all other necessary bundle of facts forming ‘cause of action’ have arisen at Jaipur. This is for the reason that: (i) The regional office of the respondent – company is situate at Jaipur; (ii) the agreement was signed at Jaipur; (iii) the consignment agency functioned from Jaipur; (iv) all stock of lubricants was delivered by the company to the appellant at Jaipur; W. A. No. 17 of 2019 Page 36 (v) all sales transactions took place at Jaipur; (vi) the godown, showroom and office of the appellant were all situated in Jaipur; (vii) various meetings were held between the parties at Jaipur; (viii) the company agreed to lift the stock and make payment in lieu thereof at a meeting held at Jaipur and (ix) the disputes arose at Jaipur.

The learned counsel for the appellant would submit that since part of the cause of action has arisen within the jurisdiction of the courts at Jaipur and clause 18 does not expressly oust the jurisdiction of other courts, Rajasthan High Court had territorial jurisdiction to try and entertain the petition under Section 11 of the 1996 Act. He vehemently contended that clause 18 of the agreement cannot be construed as an ouster clause because the words like, ‘alone’, ‘only’, ‘exclusive’ and ‘exclusive jurisdiction’ have not been used in the clause. ” [29] The view of the respondents before the Hon'ble Supreme Court in Swastik Gases (P) Ltd. (supra) is as follows at para No. 10:- “10. On the other hand, the learned Additional Solicitor General for the company stoutly defended the view of the designate Judge that from clause 18 of the agreement, it was apparent that the parties intended to exclude jurisdiction of all courts other than the courts at Kolkata.

” [30] The Hon'ble Supreme Court relying upon the cases of the Hon'ble Supreme Court in Hakum Singh vs. Gammon (India) Ltd. (1971) 1 SCC 286,; Globe Transport (Corpn. ) Triveni Engg. Work, (1983) 4 SCC 707 and A. B. C. Laminart (P) Ltd. Vs. A. P. Agencies, (1989) 2 SCC 163, took the following view at para No. 31, 32 33, 34 as below:- “31. In the instant case, the appellant does not dispute that part of cause of action has arisen in Kolkata. What appellant says is that part of cause of action has also arisen in Jaipur and, therefore, Chief Justice of the Rajasthan High Court or the designate Judge has jurisdiction to consider the application made by the appellant for the appointment of an arbitrator under Section 11. Having regard to Section 11(12)(b) and Section 2(e) of the 1996 Act read with Section 20(c) of the Code, there remains no doubt that the Chief Justice or the designate Judge of the Rajasthan High Court has jurisdiction in the matter.

The question is, whether parties by virtue of clause 18 of the agreement have agreed to exclude the jurisdiction of the courts at Jaipur or, in other words, whether in view of clause 18 of the W. A. No. 17 of 2019 Page 37 agreement, the jurisdiction of Chief Justice of the Rajasthan High Court has been excluded. 32. For answer to the above question, we have to see the effect of the jurisdiction clause in the agreement which provides that the agreement shall be subject to jurisdiction of the courts at Kolkata. It is a fact that whilst providing for jurisdiction clause in the agreement the words like ‘alone’, ‘only’, ‘exclusive’ or ‘exclusive jurisdiction’ have not been used but this, in our view, is not decisive and does not make any material difference. The intention of the parties - by having clause 18 in the agreement – is clear and unambiguous that the courts at Kolkata shall have jurisdiction which means that the courts at Kolkata alone shall have jurisdiction.

It is so because for construction of jurisdiction clause, like clause 18 in the agreement, the maxim expressio unius est exclusio alterius comes into play as there is nothing to indicate to the contrary. This legal maxim means that expression of one is the exclusion of another. By making a provision that the agreement is subject to the jurisdiction of the courts at Kolkata, the parties have impliedly excluded the jurisdiction of other courts. Where the contract specifies the jurisdiction of the courts at a particular place and such courts have jurisdiction to deal with the matter, we think that an inference may be drawn that parties intended to exclude all other courts. A clause like this is not hit by Section 23 of the Contract Act at all. Such clause is neither forbidden by law nor it is against the public policy. It does not offend Section 28 of the Contract Act in any manner. 33. The above view finds suppo

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