Basant Bagde v. Hindustan Prefab Ltd & Ors

* THE HIGH COURT OF DELHI AT NEW DELHI + % BASANT BAGDE LPA176 OF 2011 Pronounced on: 03.2.2012 ... APPELLANT Through: Mr. Amit Anand Tiwari, Advocate with Mr. Ajay Kumar Singh, Advocate. VERSUS HINDUSTAN PREFAB LIMITED & ORS. . .. RESPONDENTS __...-:_ _. Through: Mr. Radhakant Tripathy, Advocate for R.l & 2. CORAM:- Mr. A.P. Mayee, Advocate with Ms. Praveena Gautam, Advocate for R.3. HON'BLE THE ACTING CHIEF JUSTICE HON'BLE MR. JUSTICE SIDDHARTH MRIDUL A.K. SIKRI, ACTING CHIEF JUSTICE: I. For orders, see LPA 7 of2010. FEBRUARY 3, 2012/skb LPA 17612010 ~- ACTING CHIEF JUSTICE u ' ol-----1 (SIDD~ MRIDUL) JUDGE ?age 1 of I * THE HIGH COURT OlFIDELHI AT NEW DELJfH + % BASANT BAGDE LPA 7 OF 2010 &. LPA 176 OF 2011 Pronounced on: 03.2.2012 LPA 7 OF 2010 ... APPElLANT I Mr. Amit Anand Tiwari • Advocate with Mr. Ajay Kun{ar Singh., Through: Advocate. VERSUS -~~- HINDUSTAN PREFAB LIMITED & ORS. . ... RESPONlilU:~NTS Through: l\1r. Radhakant Tripathy. Advocate for R.l & 2. Mr. A.P. Mayee, Advocate with 1\!Is. Praveena Gautam. Advocate for R.3. LPA 176 OF 2011 % Pronounced on:03 .2_)012 BASANT BAGDE ... APPEULANT Through: Mr. Amit Anand Tiwari, Advocate with Mr. Ajay Kumar Singh, _.... Advocate. VERSUS HINDUSTAN PREFAB LIMITED & ORS. . .. RESPONDENTS LPA 712010& 17612010 Through: Mr. Rad.hakant Tripathy. Advocate for R.l & 2. l\1r. A.P. Mayee, Advocate ·with Ms. Praveena Gautam. Advocate for R.3. Page 1 u(24 __ , ______ , ______ _ CORAM:- HON'BLE THE ACTING CHIEF JUSTICE HON'BLE MR. JUSTICE SIDDHARTH MRIDUL A.K. SIKRI, ACTING CHIEF JUSTICE

¶1The appellant herein had filed Writ Petition (C) 13836/2009 seeking following prayers:-

(i) Issue a writ of certiorari quashing the order dated

30.6.2009 passed by respondent no.1;

(ii) Issue a writ of mandamus directing the respondents to apply the amendment no.26 dated

1.4.2008 by way of which the rate of steel was increased from ~ 24/- to 'Z' 50/- to present contract awarded to the Appellant for 11 packages;

(iii) Issue a writ of mandamus directing the respondents to make the payment to the appellant after calculating the rate of steel @) z 50/- per kg;

(iv) Issue a writ of certiorari quashing the letter dated

16.9.2009 of respondent no.l cancelling six packages out of total 11 packages awarded to the appellant;

(v) Issue a writ of mandamus directing the respondents not to cancel the contract of the appellant in respect of remaining 5 packages; I I

(vi) Pass such other writ, order or orders or direction, which may be deemed fit and proper in the racts and circumstances of the case and in the interest of justice. LRA 712010 & 17612010 l'uge 2 o/24 .,_ -----·---··--~-----------·'-

¶2When this writ petition came up for preliminary hearing on I i December, 2009 before the learned Single Judge, the learned Single -Judge issued limited notice pertaining to prayer (iv) and (v) only and refused to issue notice in respect of prayers (i) to (iii)., As far as prayers (i) to (iii) are concerned, the appellant herein had sought direction against the respondents to make the payment at the increased rate from~ 24/- to~ 50/- in respect of the contract awarded by the respondent to the appellant. Vve may state that the respondent had floated tenders for construction of Houses with Infrastructure under BSUP Scheme of JNNURM in Raipur City. The tenderers were required to submit their bid on percentage basis at par, over or belo/v the r.ates ! based upon Chhattisgarh PWD Schedule of Rates (SOR 1 ~99). The appellant was awarded the contract on rates quoted by him@ 59% above SQR 1999. However, between 21st March, 2008 and 3rJ ApriL 2008, the rate of steel was increased from ~ 24 per kg to t 50 per kg in the SOR 1999. On that basis the appellant had claimed that he was entitled to the benefit of the said enhanced rate in steel from ~ 24 per kg to t 50 per kg w.e.f. 1st April, 1999. This demand was rejected by the respondent. That was the reason for making a prayer for payment @ t 50 per kg instead of LPA 712010& 176/2010 Pogc 3 oj'24 ~· 24 per kg against the consumption of the steel in the contract. The learned Single Judge refused to issue the notice on these prayers in his order dated 17th December, 2009 and took the view that the stand Utken by the respondent does not require interference while exercising power of judicial review under Article 226 of the Constitution of India. At best there is a commercial dispute between the appellant and the respondent M/s Hindustan Prefab Ltd. to which the appellant had adequate remedy I by invoking arbitration clause or invoking jurisdiction of a divil court. Challenging this order dated 9th December, 2009 whereby the notice was issued to limited extent, the appellants have filed LP A 7/20 10.

¶3While this appeal was pending, the writ petition on which notice was issued in respect of prayers (iv) and (v) was ultimately decided by the learned Single Judge after the completion of pleadings on that aspect and hearing the oral submissions of the pmiies. It has culminated in the judgment dated 27th September, 2010 rendered by the learned Single Judge dismissing the writ petition even as regards prayer (iv) and (v) finding no merits in those prayers as well. It is for this reason, t\vo appeals i.e. LPA 7/2010 and 176/2011 were clubbed and heard together which we propose to decide by means of present judgment. LPA 712010&17612010 f'ugr 4 n/'24 . ---··-·------ ,_ ---. - ·-··-· ····- - - ------ I

¶4First, facts in brief:

(i) On 20th March, 2008, the respondent issued a notice inviting I I sealed percentage rate tender (NIT) for construction of houses with infrastructure under BSUP Scheme of Jl'JNURM in Raipur City. Under this Scheme, houses at low cost were to be constructed in 11 packages in two lots of five and six packages ·at Raipur in Chhattisgarh. Scheme vvas that of State of Chhattisgarh for which the respondent no.l, a Govemment of India Undertaking was chosen as an executing agency by the State/respondent no.3.

(ii) The tenders were to be submitted between 21st March, 2008 ancl3rd April, 2008. Clause 5 of the Special Conditions of Contract (SCC) required the tenderer to quote rates on percentage basis ·'below/at par/over) Madhya Pradesh (Chhattisgarh) Schedule of Rates, 1999''. Clause 11.01 oftheNIT provided that in case of percentage rate tenders. ''the tenderer should quote a unique single percentage (plus/at par/min us) over the total estimated amount given in the schedule/bill of quantities." It is further stated that "under no .circumstances, such a tenderer is allowed to quote separate percentages for individual items, trade::; or group of items." As per the appellant, four attempts were ma1e on earlier I LPA 712010& 176/2010 Pugc 5 '!I 24 ---------~-- occasiOns by the respondent HPL to award the contract but the bids received were non-competitive. It is for this reason, on 1 sl April, 2008 the Competent Authority i.e. the Engineer-in-Chief of Public works Department (PWD), Chhattisgarh amended the Madhya Pradesh (Chhattisgarh) Schedule of Rates, 1999 (SOR) for building works by enhancing the rate of steel from~ 24 per kg to~ 50 per kg.

(iii) The appellant submitted SIX tenders on percentage basis. The quoted rates were 109% above the SOR, the tenders were opened and the lowest bidder was awarded seven packages out of total 18 packages at the rate of 59% of SOR. Thereafter, the HPL negotiated with the appellant as well in terms of Clause 7 of NIT. The appellant agreed for L-1 price which was 59% above SOR, subject to grant of q. minimum of five packages. It was in these circumstances, contract relating to five packages was awarded to the appellant by the HPL vide agreement dated i 11 .lune, I 2008. As per this contract, the appellant was required to consthtct in each package 1536 dwelling units within a period of 18 months. Thereafter, ·another supplementary agreement dated 23rd August, 2008 was also signed between the appellant and the HPL awarding the appe1Iant remaining six packages of the NIT as well. · LPA 712010& 176/2010 Page (j o/24 - - ----------------~--------~-~---..... --·-·----·--··.0 ------------ ----- -r -. \'f,

(iv) The appellant states that he commenced tLe work and submitted his first running account bill to the HPL. In the said bill, the appellant wh:ile quoting the rates of steel, took into account the rate of steel as amended up to 1st ApriL, 2008 by the Competent Authority. However, HPL refused to entertain any claim on the basis of the revised rates of steel, and conveyed this by its letter dated 18th September, 2008. /

(v) Aggrieved by the· above decision dated 18th September, 2008 the appellant filed a W.P.(C) 7044/2008 before this Court. On 1~Lh March, 2009 the learned Single Judge dismissed the writ petition on the ground that the appellant had an alternative remedy by way of arbitration. l1 was further held that this Court did not have territorial jurisdiction merely because HPL was located in Delhi. Also, the failure to implead the ~tate of Chhattisgarh was held to be fatal to the appellant. --·-·---··-----· --·-·· ---------·-·--·-

(vi) Aggrieved by the above order dismissing his writ petition, the appellant filed a LPA No. 182/2009 before the Division Bench of this CoU1i on 15th April, 2009. By an order dated 21st May, 2009 in the LPA. the Division Bench impleaded the State of Chhattisgarh as a party. By a LPA 712010& 17612010 Page 7 o/24 --···~--------·-----·-··----··---·------------ --------1---- T detailed judgment dated 28th May, 2009, the Division Bench allowed the · LP A and directed HPL to consider the claim of the appellant for grant of . increased rate of steel @ ~ 50 per kg. The Division Bench held the writ petition projecting disputes arising out of a contract to be nevertheless ! maintainable in view of the decision of the Supreme Court in ABL ! International Ltd. Vs. Export Credit Guarantee Corporatimi of ln.dia

(2004) 3 SCC553. (

(vii) As per the appellant, the HPL informed him that pursuant to the aforesaid directions of the Division Bench of this Court in LP A, the case of the appellant for grant of amended rate of steel had been recommended to the State of Chhattisgarh. However, the State of Chhattisgarh (K-3) reiterated that the appellant should accept ~ 24 per kg and the petitioner also gave an undertaking on 29th June, 2009 that he would not be approaching this Court for adjudication of his grievances. On this basis, order dated 30th June, 2009 was passed by the HPL stating that the appellant was not entitled to the amended rate of steel.

(vii) In the writ petition filed by the appellant claiming this rate of Z 50 per kg, the appellant has alleged that since he was facing-huge losses on LPA 712010 & 17612010 Page 8 o(24 ----·-------· ---- ,account of denial of the payment of work already completed by him and his business virtually came to halt for want of money, he accepted the rate of~ 24 per kg under unrelenting coercion. He filed two Cl\1s in the disposed of LP A alleging that the respondents were neither making payment on the basis of the admitted rate of steel and had also stopped making land available for the construction of the houses. Prayer was made for grant of amended rate of steel at ~ 50 per kg. ln these applications, notice was issued on 15th September, 2009. On 16th September, 2009, HPL cancelled the six packages out of total 11 packages awarded to the appellant on the ground that the appellant had failed to comply with one of the terms of contract which required him to furnish a performance guarantee. Suffice it to state that one more application was filed by the appellant ·.challenging the order dated 16th September, 2009 which was taken up on lOth November, 2009. The appellant withdrew these applications with liberty to file substantive writ petition. It was in this backdrop that the writ petition was filed which has met the aforesaid fate and Is now the subject matter of tpe present appeals. LPA 7/2010 & 17612010 f'uge 9 o/24 . ·-----~-~-~-------------~--------·-··-------·-·-----.--- ---·1

¶5It is clear from the aforesaid narration that two aspects of the issue were taken up by the appellant namely;(i) payment of steel at the increased rate from { 24 per kg to { 50 per kg in respect of which no notice had been issued by the learned Single Judge holding that the same can be agitated in the arbitration proceedings or civil proceedings;(ii) to challenge the orders dated 16th September, 2009 whereby 6 packages out of 11 were cancelled and the appellant al'so wanted restrain order against the respondent for not cancelling the remaining 5 packages as well. Since the two issues are the subject of two appeals, we take up these issues in each of these appeals. LPA 7 OF 2010

¶6The short question in this appeal is as to whether issue of payri1eni f!:t increased rates from { 24 per kg to {50 per kg could be dealt with in the writ proceedings or the appellant is required to initiate arbitration/civil proceedings to agitate this claim. The learned Single Judge while relegating the appellant to civil proceedings has given the follovving rationale: "At best there is a commercial dispute between the petition and the respondent M/s Hindustan Prefab Ltd. to which the appellant has adequate remedy by invoking arbitration clause, if any, or invoking jurisdiction of a LPA 712010 & 17612010 !'age }'{) rf24 civil comi. This is not a case in which the stand taken by the respondents can be per se categoriz~d as arbitrary, which requires interference of the writ court. The respondents are entitled to take a commercial decision and have to be given sufficient latitude when they take administrative decision in commercial matter in the interest of the respondents cmnpany. As per the letter dated 30th June, 2009, the terms of SOR 1999 before amendment dated 1st April,. 1999 are applicable and on this basis the tender of the appellant \Vas found to be lowest. In LPA No. 182 of 2009, the Division Bench interfered and held that writ jurisdiction could be invoked as "no decision has been (was) taken on the bills raised ... as per revised rates". It was held that "indecision and inaction was unacceptable and unreasonable". The respondent has now taken their decision and the appellant if aggrieved and has any dispute, should invoke ordinary civil jurisdiction."

¶7Assailing the aforesaid reasomng given by the learned Single · Judge, argument of the appellant was that there was no dispute of facts and only interpretation of certain Clauses of the contract was involved. He argued that admittedly last date for submitting the tender rd was 3 April, 2008 and the tenderer were required to submit their bid on percentage basis at par, over and below the ra<::es based upon SOR 1 999. The aforesaid schedule of rates i.e. SOR 1999 was revised on 1st ApriL 2008 i.e. before the last date of subni1ssion of the tenders and the rate of steel was increased from ~ 24 to ~ 50 per kg. The rates submitted on the basis of which contract was entered between the HPL and the appellant LPA 712010& 176/2010 Puge J' I u(24 C)£; was 59% above SOR 1999. The learned counsel for the appellant argued that in these circumstances, the only question was as to wJether lhe I original rates under SOR 1999 were applicable or SOR 1999 as amended on 1.4.2008 were applicable when the last date of submission of tender was 3 .4.2008? This, contended the learned counsel, was a pure question of law and, therefore could have been gone in the writ proceedings. He argued that the SOR 1999 as amended on 1.4.2008 was clearly applicable as per which the appellant was entitled to the increased price rate of steel @ '{ 50 per kg and non-payment thereof was clearly arbitrary action of the respondents and in these circumstances provision of Article 14 stood attracted and thus the writ petition was m:~jntainable. He also relied upon the earlier judgment of the Division Bench dated 15th September, 2009 and according to him the Division Bench had already held in the said case that the writ petition was maintainable. He thus submitted that this order pertaining to the same contract between the same parties rendered by the Division Bench was binding on the learned Single Judge.

¶8The facts which emerged on record disclose that the appellant had earlier filed writ petition No. 7044/2008 seeking identical relief namely payment at increased rate on'50 per kg instead of< 24 per kgl This was I LPA 712010 & 17612010 f'uge 12 n(24 --------·-···---------------·--·-· ----·-----~---------··---~~----· ----________ , -------~----···---I ----I / dismissed by the learned Single Judge vide order dated 19th March .. 2009 on two grounds:-

(a) The issue could be a subject matte1~ under Article 226 of the Constitution and proper mechanism in resolving the issue is either the arbitration or civil proceedings as the case may be;

(b) The High Court of Delhi .did not ,have territorial jurisdiction merely because the HPL'had its office in Delhi. More so, HPL was an executable agency in respect of work for the principal namely State of Chhattisgarh and was to be performed at Raipur, Chhattisgarh and when the State of Chhattisgarh which was a necessary party was not even impleaded.

¶9In the LP A 182/2009 filed by the appellant challenging this order of the learned Single Judge, the Division Bench admitted the appeal and impleaded the State of Chhattisgarh as a patiy. Thereafter, the appeal was finally decided on 28th May, 2009 holding that this Court has the territorial jurisdiction. The Division Bench also held that the vJrit petition was maintainable inasmuch as even in contractual matters, if the action of the State and its instrumentality is arbitrary, unreasonable and illegal, the Court can exercise its extra ordinary jurisdiction under Article 226 or the Constitution. Support from the ratio laid down by the Apex Court in A.B. International Ltd. (supra) was taken. Applying this ratio. the Division Bet-1ch made the following observation:- LPA 712010 & 176/2010 Pugc 13 o/24

¶10" On a given set of facts if 'the State' acts in an arbitrary manner even in a matter of contract, an aggrieved party can approach the court by way of writ under Article 226 of the Constitution and the Court depending on facts of the said case is empowered to grant the relief. In The present case there has been an amendment to the rates on the basis of which the appellant has raised its demand. No decision has been taken on the bills raised by the appellant as per the revised rates. This indecision and inaction clearly is unacceptable and unreasonable. We have, accordingly directed respondent No.1 which had floated the tender enquiry on behalf of the State of Chhattisgarh to take a decision within a period of two weeks. 1t will be open to the appellant to take appropriate remedies in accordance with law in case it is I aggrieved by the decision of the respondent no. 1 With these observations, the present appeal as also the writ petition stand disposed of as nothing further survives in the same." It is clear from the above that what was perceived as arbitrary and on the basis of which the writ petition was held to be maintainable was that even the decision on the request of. the appellant for payment at the rate of~ 50 per kg. instead of~ 24 per kg qua the quantity of steel had not been taken. This is clear from the reading of para 5 of the said order wherein the contention of the counsel for the appellant were noted as per which vide letter dated 18th September, 2008, the Public Works Department, Chhattisgarh, Raipur had directed the HPL to take a decision at its level in r~spect of bills as per the contract but no decision LPA 712010 & 176!2010 Page i'4 o(24 -r had been taken. In para-6 on this point the Bench observed that in view of the categorical stand of the HPL that they were directed by the PWD to take a decision, the said decision had rl'ot been taken and this direction was given to the HPL to take decision within two weeks.

¶11In view of the above, it would be difficult for the appellant to take shelter made the aforesaid order of the Division Bench. The order did · not go to the extent of holding that if the decision taken by the HPL goes against the appellant even then the appellant shall be entitled to 1ile -a writ petition.

¶12Still, one could argue (which is the submission of the appellant as well) that if there are no disputed question and the matter pertains only to interpretation of the Clause, the matter is in the realm of interpretation on the basis of the rates which are admissible to the appellant, writ petition .'- could be maintainable as denial of 'admitted' rates may amoum to arbitrariness on the part of the State or instrumentality /agency of the State. However, the matter does not rest here. This argument ignores certain vital facts which take away the case from the realm of "admitted facts" and bring the issue in the arena of "disputed facts". As per the LPA 712010& 17612010 appellant himself, when the respondents reiterated and asserted that the appellant shall be entitled to claim on~ 24 perk~ for the qualities of steeL t1e accepted the same vide his letter dated 26th September, 2009. This letter is in Hindi and English translation whereof reads as under:- "For the afore subject vyork, I am agreeable to work at the sanctioned rate of Steel at the rate of~ 24 per kg. plus 59 percent agreed as per the contract agreement for the rate of steel and I will not go to court in respect of rate of steel."

¶13There is also, on record, letter dated 30th June, 2009 addressed by HPL to the appellant narrating the events of the contract in question and ascertaining that the appellant had entered into ::tgreement/contract which is subject to the general/special terms and condition as per the bid documents and the offered rates selected to the bid process. As per the respondent, there was no terms and condition 'ror price escalation to the agreement/contract for the subject project. The decision as per this letter thus :was that amended notification dated 1.4.2008 issued by the Chief I Engineer, PWD was not applicable. It is also highlighte1 that the appellant willingly signed the agreement much later than the date of issue of the amendment to SOR 1999 rates and at the time of signing and acceptance of work, the appellant had not raised any objection about LPA 712010& 176/2010 Page 16 o/'24 I )b the amended rate and its implication in future and therefore the claim for '{50 per kg was not justified. It is important to note that the appellant has not denied his letter dated 29th June, 2009 vide which he accepted the · rates of '{ 24 per kg. His submission is that the respondents were not releasing the payments even in respect of work already completed and because he was facing financial crunch and therefore, issuance of this letter was unvoluntary and under coercive circumstances. Naturally, these are the aspects which cannot be dealt with or gone into in writ ,, proceedings under Article 226 of the Constitution which is an extra ordinary jurisdiction. In these circumstances, if the discretion 1s exercised by· the learned Single judge relegating the parties to I arbitration/civil remedies, we do not fiqd any error therein as the aforesaid dispute highlighted by us requires evidence which process can be under taken only in arbitral/civil proceedings.

¶14We thus confirm the orders dated 1 i 11 December, 2009 passed by the learned Single Judge refusing to issue notice on prayer (i), (ii) and

(iii) of the writ petition and dismiss this appeal. LPA 712010 & 176/2010 Page 17 o/24 --·-•••·--•-~••·-•• •••·--···------·-···--'•"""""To••o• ~~~------, -~-- • --------- -~- --- -- -- r • - '" --- LP A 176 OF 20Jl0:

¶15As pointed out above, the subject matter of this appeal is letter dated 16 111 September, 2009 vide which the HPL cancelled 6 packages out of total 11 packages awarded to the ·appellant. The reason which led to this cancellation, as stated in the said letter is that the appfllant had I failed to fulfill the contractual obligation . to furnish pei-formance ! guarantees as mentioned in Letter of Intent (LOI) dated 24th July, 2008 /" and agreement dated 23rd August, 2008. It is stated that according to / condition No.7 of NIT dated 20 1h March, 2008 and also condition No. 9 1 of the General Conditions of Contract, ,it was obligatory on the part of the appellant to furnish the performance guarantees and since these guarantees have not been furnished, the LOI issued thus stands · withdrawn and contract cancelled.

¶16It is not in dispute that the bank guarantees as required under the said LOI had not been furnished by the appellant. However, the main plank of attack of the appellant quashing the termination was that the aforesaid communication dated 19th September, 2009 was an act of arbitrariness and malice in law. Malice was sought to be projected by LPA 712010 & 17612010 i;age 18 o(24 I submitting that after the judgment of the Division Bench in the ±1rst round of litigation, the respondent had become vindictive. Though, the appellant had completed the substantial work in respect of contract, payments were due and not released to the appellant even when calculated under unamended rates. It was argued that these payments could easily be adjusted towards the amount for which bank guarantees for the remaining 6 packages were to be furnished a!1d non furnishing of the said bank guarantee was only an excuse. It was also argued that the HPL had received a sum of~ 41.22 crores from the respondent no.3 vvho had retained~ 18.3 crores. In the counter afficiavit filed by the HPL the HPL had joined the issue on each other aspect. It contended that there were no outstanding bills of the appellant that remained to be paid. It ·was also denied that HPL or its CMD had acted out of malice either in law or in fact. The HPL went to the extent of arguing that there was serious issues of non-fulfillment of the conditions of the contract by the appellant concerning even the other 5 packages but at present the said contract of 5 packages have not been cancelled which showed that no malice was shown by the HPL. LPA 712010 & 176/2010 Page JQ o/24

¶17The learned Single Judge after c9onsidering the aforesaid respective pleas, dismissed the writ petition vide impugned order dated · 2i 11 September, 2007 taking a view that the matter was purely contractual in nature and there was no serious dispute on the essential facts.

¶18The respective pleadings of both the parties in fact reflect that the issue raises the disputed qu~stion of facts. Coupled with this, we notice that furnishing of performance guarantee was a mandatory condition and has not been admittedly fulfilled by the appellant. Termination of the contract on this ground would be in accordance with the contractual! terms .prima facie cannot be termed the issue as to whether substantial amount were due to the appellant from other contracts and against those payments, the guaranteed amount could_ be adjusted or not is an issue which can be gone into only in arbitral/civil proceedings and cannot be the subject matter of the Article 226 of the Constitution . . '-

¶19This leaves us to the question as to whether there was any malice in law as malice in fact cannot be determined unless the facts are Ji1rst ascertained. LPA 712010 & J7(J/2010 Page 20 o(24 - -----------·-· -·-·~------.-,-----·~---~- ---~~---·-- . -·· r I

¶20In an attempt to establish malice in law, the appellant relied upon and referred to the letter dated 19th September, 2009 which was vvritten by HPL to the Principal Secretary of respondent no.3/State. In that. letter, reference was made to meeting held on. 28th August, 2009 between the Princ_ipal Secretary of the Government and the officials of the HPL w·hen the withdrawal of the contract awarded to the appellant was decided, for which the land was yet to be made available by the State Government for execution. In this letter, it is stated that the contract with the appellant . . I _;; has been cancellyd by issuing letter dated 16th September, 2009 which .further mentions that:- "We have cancelled the contract putting blame of non-fulfillment of contractual obligations by the contractor, although we were unable to hand over the land for the project, being not made avapable to us by the Government of Chhattisgarh and also the constraints in release of funds, even against the ongoing contract." The HPL has further stated that because of non allotment of the land by the State to the HPL, the HPL is not to be made responsible for any financial implications or legal issues ansmg, if any, due to cancellation of contract. This letter, in first blush, may give an impression that the contract is terminated for oblique reasons, inasmuch as it was LPA 712010 & 17612010 Page 21 oj24 _______ .... _____________ .. _______ ...... ___________ ·--- ---·· --------------------- --- -T - : 0,0 / 3/ dated 7"" June, 2008. True copy of the C.M. No. 9603/2010 In W.P.(C) 13836/2010 is annexed herewith and mari<ed as ANNEXURE A/35 (page ^12-^ +& 2-36J)

¶47That vide judgment dated 27.09.2010 the Hon'ble Singie Judge dismissed the Writ Petition of the petitioner.

¶48That thereafter the respondent no.l cancelled the ongoing contract and invoked the performance guarantee and mobilization advance banl< guarantee, copy Of letter dated 20.12.10 from the respondent cancelling the contract and invoking the bank guarantee is annexed and marked herewith as ANNEXURE A/36 (page 237 to is9 ).

¶49The Banker of the appellant issued a letter dated

20.12.2010 to the appellant stating that the respondent no.l had invoked the bank guarantee of ?8.32 Crore and asked the appellant to deposit asum of ?8.32 Crore. Acopy of letter dated 20.12:2010 of Allahabad Bank is annexed herewith and marked as ANNEXURE A/37(page 240to ).

¶50The Appellant seeks to challenge the impugned order on the following amongst other grounds: I grounds -- ---~ ---- -- by the Secretary MoHUP A relared to '·'serious issues of delay and poor quality arising entirely due to bad execution and supervision. The meeting was not meant to conspire on how to falsely implicate anybody." He added: "your letter seeks to give an impression that the Secretary MoHUP A-GOI or the undersigned had directed you to unfairly act against the contractor to cancel his LOI. Such suggestion is simply atrocious and confirms our suspicions that HPL' s sympathies are more towards the non-performing contractor than towards the Governmei1t of Chhattisgarh which has engaged your services and whose trustee you are expected to be". While asserting that "neither land nor money is an issue at all", the Principal Secretary signed off the letter stating "please note that we shall act to ensure that all culprits are brought to justice.

¶21The above exchange of correspondence hardly enables this Comi to come to a conclusion that Respondent No.3, with whom the Appellant admittedly has no privity of contract, and HPL, with whom alone the Appellant had a contract, were conspmng to m'lfairly terminate the Appellant's contract for six packages. The entire case of the Appellant hinges on the letter written by Respondent No.2 to Respondent No.3 which is at best hearsay evidence which in any event is disputed by Respondent No.3. The latter in fact seems to suggest that Respondent No.2 is trying to shield the Appellant. In fact, learned Senidr Counsel for the Appellant was hard pressed to show how the above exchange of con·espondence substantiated the case of the appellant that either or both Respondents 1 and 3 were acting against him out of malice in law or fact." LPA 712010 & 17612010 Page 23 uj24 .----------- ----------- ./J.,v /

¶22Vve are quite in agreement with the aforesaid analysis, mahce in law is not established. Whether there was malice in fact or not can be gone into only on the basis of evidence and the learned Single Judge has rightly relegated the parties to alternate remedies.

¶23Accordingly, this appeal is also dismissed. However, there shall be no order as to costs. FEBRUARY 3, 2012 skb LPA 7/2010 & 17612010 ~-Lti'~-- ACTING CHJIEF JUS'fXCJE . (smii~TIM~L) JUDGE I