Contract termination, Writ Petition, Calcutta High Court, Amal Biswas, State of West Bengal, Arbitration, Article 226, Arbitrary action, Foreclosure
 10 Jul, 2026
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Amal Biswas Vs. The State of West Bengal & Ors.

  Calcutta High Court W.P.A. No. 17733 of 2025
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Case Background

As per case facts, the petitioner, a proprietor of "URJA INFRA," was awarded a contract for road construction. During the work, heavy rains and sudden water release from DVC caused ...

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Document Text Version

IN THE HIGH COURT AT CALCUTTA

(Constitutional Writ Jurisdiction)

APPELLATE SIDE

Present:

The Hon’ble Justice Krishna Rao

W.P.A. No. 17733 of 2025

Amal Biswas

Vs.

The State of West Bengal & Ors.

Mr. Anirban Ray, Sr. Adv.

Mr. Anujit Mukherjee

Mr. Sourav Chatterjee

Mr. Subham Saha

....For the petitioner.

Mr. Partha Chakraborty

Mr. Arghya Chatterjee

….For the State.

Hearing Concluded On : 19.06.2026

Judgment Delivered On : 10.07.2026

Judgment Uploaded On : 10.07.2026

2

Krishna Rao, J.:

1. The petitioner has filed the present writ petition challenging the order

of termination of the contract of the petitioner being Memo No. 1515

dated 28

th July, 2025. The petitioner is the sole proprietor of “URJA

INFRA”. The respondent no.5 published a tender for “Kotalpara

Kshusiganj Road from 0.00 Kmp to 7.90 Kmp - River side embankment

protection and strengthening work – under Hooghly Construction

Division in District of Hooghly during the year 2022-2023”. The

petitioner has participated in the said tender process. The bid of the

petitioner was duly accepted by the respondent no.2 and on 28

th

February, 2024, a Letter of Acceptance was issued to the petitioner.

2. During the commencement of the work, in the month of August 2024,

the heavy rain caused flood resulting into stagnation of water at the

work place. The respondent no.6 by a letter dated 3

rd September, 2024,

called upon the petitioner to rectify damages caused due to heavy rain

and stagnation of water. The petitioner started repair of damaged work

and was communicated to the respondent no. 6 by a letter dated 5

th

September, 2024.

3. By a letter dated 10

th

September, 2024, the respondent no.4 requested

one M. Amarnatha Reddy, Professor at IIT Kharagpur to conduct a

technical audit of the work being undertaken by the petitioner. On 18

th

September, 2024, the locale faced floods not only due to heavy rain but

primarily due to sudden release of water by Damodar Valley

3

Corporation (hereinafter referred to as “DVC”), thereby causing

devastating damages to the road constructed by the petitioner. The

State has taken the decision for release of water by the DVC and no

prior intimation was given to the petitioner. The loss and damage to the

construction undertaken by the petitioner was such that it was not

possible to the petitioner to repair or re-execute the work. The

petitioner by a letter dated 27

th

September, 2024, informed the

respondent no.6 of such situation along with photographs showing the

water stagnation causing damage to the road. The petitioner submitted

bills claiming for excess payment in nature of compensation towards

damages incurred.

4. The Chief Engineer & Director, Road and Building Research Institute,

PW (Roads) Directorate forwarded the test report of the DBM to the

respondent no.6 on 3

rd October, 2024, recording that “Test Result is

within acceptable limit”. On 6

th November, 2024, a meeting was held at

the work site in presence of the respondent no.6 wherein it was assured

the payments against the work done by the petitioner would be

considered and released but no payment was released. The petitioner

has sent a letter dated 19

th

November, 2024, requesting for release of

payment and for extension of time to complete work subject to payment

of bills. The respondents have neither release payment nor extended

the time to complete the work, the petitioner has sent a legal notice to

the respondents on 3

rd

December, 2024.

4

5. Mr. Anirban Ray, Learned Senior Advocate representing the petitioner

submits that on 9

th December, 2024, the respondent no.6 issued a

Memorandum directing the petitioner to rectify the damages to the

constructed road by granting suo moto extension of time till 28

th

February, 2025. The petitioner by a letter dated 18

th December, 2024,

informed the respondents that the damages were caused due to the

natural calamity and thus the petitioner is not liable for the same. By a

communication dated 30

th

December, 2024, the respondent no.6

rejected the claim of the petitioner for compensation. By a letter dated

3

rd

January, 2025, the respondent no.6 informed to the petitioner that

their proposal for constructing paver block was not acceptable and

directed the petitioner to complete repair work as outlined in the

communication dated 16

th December, 2024.

6. Mr. Ray submits that a meeting was held on 27

th January, 2025, in

presence of the officials of the respondents and the petitioner, wherein

the respondent authorities have admitted to the loss and damage to the

road due to heavy rain and flood. E-file had been initiated for obtaining

necessary concurrence for foreclosure of the existing contract with no

defect liability period in terms of the tender agreement. It is also

recorded that the petitioner has executed the work as per specifications

and outstanding amount would be released at the earliest subject to

certain formal measurements.

7. Mr. Ray submits that the respondent no.6 with the utter disregard to

the decision dated 27

th January, 2025, issued a letter on 2

nd June,

5

2025, by extending the time for completion of work till 6

th September,

2025. Thereafter, by a letter dated 3

rd June, 2025, the petitioner

informed the respondents that the extension granted by the

respondents is defective as the extension was granted only after three

months from the date of expiry of the last extension and without taking

into consideration the Minutes of Meeting dated 27

th January, 2025,

which is binding upon both the parties.

8. On 13

th

June, 2025, the respondent no.6 issued a show cause notice to

the petitioner and the petitioner has submitted reply to the show cause

notice on 18

th

June, 2025. On 2

nd

July, 2025, the respondent no.6

imposed penalty upon the petitioner in terms of Clause 2 of the

agreement. On 8

th July, 2025, the petitioner has submitted reply to the

penalty imposed upon the petitioner and requested the respondents to

withdraw the penalty. The petitioner only to settle the issue informed to

the respondents that the proposed commencement of work for

rectification will be done subject to schedule of rates being reasonably

assessed at the current rate. Without considering the Minutes of the

Meeting and the proposal made by the petitioner, the respondents have

issued show cause notice to the petitioner on 11

th

July, 2025 and the

petitioner has submitted reply to the said show cause notice on 21

st

July, 2025, intimating all the facts.

9. Being aggrieved with the act of the respondent authorities, the

petitioner has preferred a writ petition before this Court being WPA No.

16831 of 2025 and on receipt of the copy of the writ petition, the

6

respondent no.6 has issued memo dated 28

th July, 2025 and

terminated and rescinded the contract and also issued notice to the

petitioner for forfeiture of Earnest Money Deposit and Security Deposit.

10. Mr. Ray submits that on the same day, the petitioner has received a

letter from the respondent no.5, who is a higher authority than the

respondent no.6 informing the petitioner that if the petitioner resumes

and completes the work, the penalty imposed under Clause 2 may be

considered. He submits that the letter issued by the respondent no.6 is

completely contrary to the letter issued by the respondent no.5. The

petitioner also received a memo dated 28

th

July, 2025, issued by the

respondent no.5 to the respondent no.6 permitting the respondent no.6

to take action for termination of the contract.

11. Mr. Ray has relied upon the judgement in the case of Subodh Kumar

Singh Rathore Vs. Chief Executive Officer and Others reported in

(2024) 15 SCC 461 and submits that it is the duty of the courts to

interfere in contractual matters that have fallen prey to an arbitrary

action of the authorities in the guise of technical faults, policy change

or public interest, etc.

12. Mr. Ray has further relied upon the judgment in the case of Unitech

Limited and Others Vs. Telangana State Industrial Infrastructure

Corporation (TSIIC) and Others reported in (2021) 16 SCC 35 and

submits that the jurisdiction under Article 226 is a valuable

7

constitutional safeguard against an arbitrary exercise of State power or

a misuse of authority.

13. Mr. Ray has further relied upon the judgement in the case of Kailash

Nath Associates Vs. Delhi Development Authority and Anr.

reported in (2015) 4 SCC 136 and submits that the principle of law is

that where, by agreement, time is made of the essence of the contract,

it cannot be waived by a unilateral act of a party and unless there is a

consensus ad idem between the parties and a new date is agreed to,

merely because a party to a contract agrees to consider time being

extended for the opposite party to complete the contract, but ultimately

refuses to accord concurrence would not mean that the party has by

conduct waived the date originally agreed as being of the essence of the

contract.

14. Mr. Partha Chakraborty, Learned Advocate representing the

respondents submits that due to non-continuance with the

construction work of the road by the petitioner includes the

maintenance thereof, the road has been severely damaged and general

public of the said area submitted a mass representation to the

respondent authorities with the request for urgent repair of the

damaged road. On receipt of mass representation, the respondent

authorities requested the petitioner for taking necessary steps for

urgent repair of the said road. He submits that the authorities have

also issued reminders to the petitioner for repair of the road but the

petitioner failed to do so.

8

15. Mr. Chakraborty submits that by a letter dated 5

th September, 2024,

the petitioner informed the respondents that the petitioner has already

started taking steps for repair of the damaged road with the

consultation with the Assistant Engineer and as per the direction of the

respondent authorities. He submits that inspite of communication, the

petitioner failed to repair the damaged road. Thus, the respondents

have no other alternative but to issue show cause notices to the

petitioner for completion of the work. He submits that even after receipt

of show cause notice, the petitioner failed to take any steps for

repairing of the road and proper work for concerned river side

embankment protection and strengthening of the road.

16. Mr. Chakraborty submits that being dissatisfied with the act of the

petitioner for not commencing the work inspite of several reminders

followed by the show cause notices, the respondents have issued show

cause notices under Clause-II of the tender condition and non-

compliance of the show cause notice by the petitioner, the respondents

have issued notice under Clause-III of the tender conditions.

17. Mr. Chakraborty submits that as the petitioner failed to repair the road

inspite of several opportunities, accordingly tender of the petitioner was

terminated. The respondents taking into consideration of the

betterment of livelihood of the people at large of the said area, the road

needed to be restored in an useable condition and for that purpose the

respondents have already floated fresh tender.

9

18. On 28

th February, 2024, Letter of Acceptance–cum–Work Order was

issued to the petitioner for construction of Kotalpara Kshusiganj Road

from 0.00 Kmp to 7.90 Kmp – River side Embankment Protection and

strengthening work - under the Hooghly Construction Division in

District of Hooghly during the year 2022-2023. The time for completion

of the said work was 9 months. The petitioner has commenced the work

as per work order. During execution of work, due to heavy rain and

stagnation of water in the month of August, 2024 and September,

2024, the work undertaken by the petitioner caused grave damages. As

the contract work period of the petitioner was in existence, the

respondents have directed the petitioner to rectify the damages and the

petitioner commenced repair of the damaged work.

19. In the meantime on 18

th September, 2024, the locale faced floods not

only due to rain but primarily due to sudden release of Water by the

Damodar Valley Corporation due to which the road constructed by the

petitioner also got damaged.

20. The respondents have obtained technical audit report from Mr. M.

Amarnatha Reddy, Professor of IIT, Kharagpur and on 3

rd

October,

2024, a report on the conducting test of Bitumen Content of DBM,

Gradation of DBM, in connection with the work for construction of

Kotalpara Khusiganj Road from 0.00 Kmp to 7.90 Kmp – Riverside

Embankment Protection and Strengthening work, under the Hooghly

Construction Division in the District of Hooghly during the year 2023-

2024 is submitted wherein the “Test result is within acceptable limit as

10

per TABLE 500-13 OF MORTH” . From the report, it is clear that the road

constructed by the petitioner with respect to the contract awarded to

him is in accordance with the specifications and there are no fault of

the petitioner for use of any degrades materials.

21. On 19

th November, 2024, the petitioner made a request to the

respondent authorities for release of payment and for extension of time

as the time for completion of work was going to be expired on 29

th

November, 2024. On 9

th

December, 2024, the respondent no.6 directed

the petitioner to rectify the damages and granted extension till 28

th

February, 2024. On 27

th

January, 2025, a meeting was held in

presence of the respondent authorities and the same was recorded in

the Minutes of Meting which reads as follows:

“Minutes of Meeting held on 27/01/2025 at 12:00 PM

in the office of the Engineer-in Chief & Ex-officio

Secretary, Public Works Department 8

th Floor,

Nabanna, Howrah on present condition of

Kotalpara Khusigang Road from 0.00 Kmp to 7.90

Kmp – River Side Embankment and strengthening work

The meeting has been presided over by the

Engineer-in-Chief, PWD. The list of officers and

members present is separately enclosed.

Name of Work - Kotalpara Khusiganj Road from

0.00 Kmp to 7.90 Kmp – River Side Embankment

Protection and Strengthening work

Tender No :- 33/Hooghly Construction

Division/SEWC-II/PWD of 2023-24

Administrative Approval No:- GO2324011172PD

dated 06-12-2023 (CP – 1 to 3)

Administrative Approval Amount:-

Rs248039931.00

11

Estimated Amount put to Tender:-

Rs233070148.00

Tendered Amount:- Rs256260628.00

Contractual Rate:- 9/95% Above

Work Order No.: 371 dated 28.02.2024 of the

Superintending Engineer, Western Circle No-II. PWD

(CP 4 to 5)

Date of Commencement:- 29/02/2024

Schedule of completion:- 29/11/2024

Name of Agency:- URJA INFRA, Khidirpur, Post

Office Chhabaghati, District Murshidabad, Pin

742201, West Bengal

Brief History of the work:-

The Assistant Engineer, Hooghly Construction,

Sub-Division – II, PWD, who was present from the

beginning of the project work, has informed that the

entrusted agency completed the following works

before the monsoon:-

 Upto to 75 mm Dense Bituminous Macadam

– I (DBM-I) layer from Chainage 0.000 km to

5.360 km, 5.500 Km to 6.620 Km and Ch.

7.290 Km to 7.900 km

 Up to Wet Mix Macadam (WMM) from

Chainage 5.360 km to 5.500 km and 6.620

km to 7.290 km

Assistant Engineer has also stated that the

different layers of the road crust were executed as

per the work specifications.

High rainfall and discharge in the Damodar

River led to flood-like situations in the first week of

August 2024. Water levels rose to 500-800 mm

below the road crust in many stretches, causing

depressions. The executed DBM layer from 3.570

Km to 4.270 Km was totally damaged thereafter.

The Chief Engineer, West Zone, PWD has sent a

proposal for Technical Audit to the Professor

12

Amarnath Reddy, IIT Kharagpore on 10/09/2024,

Again devastating flood was occurred in between

September 17-22, 2024. Floodwaters from the

Damodar River, situated on the left side of the

road, suddenly overflowed and inundated the road

in certain stretches. As a result, seepage through

embankments caused settlements and depressions

at hard crust levels and pavement surfaces.

Embankment settlements occurred at various

locations due to piping action. Professor Amarnath

Reddy, IIT Kharagpur, visited the site on 18

October 2024, Professor Amarnath Reddy, IIT

Kharagpur, has submitted a scope of work on

05/12/2024 for evaluation of on-going road

construction which is under consideration of the

department,

The quality of the executed work is currently

under review by the Road and Building Research

Institute.

Present Condition :-

The road has been severely damaged due to

flooding and the subsequent passage of a large

number of heavily loaded commercial vehicles over

the damaged road. Approximately 1.5 Km of the

road remain in good condition, while the remaining

portion is in a dilapidated state. Public agitation is

escalating daily.

View of Agency :-

The agency, URJA INFRA, has been directed to

rectify the work; however, they have stated that it

would be very difficult for them to undertake such

repair work.

Decision :-

An E file has been initiated for obtaining

necessary concurrence for fore closer of the existing

contract with no Defect Liability Period (DLP) under

Clause 3B of the tender agreement 2911(ii) vide

File No. PWD-25/8/2025-DIR(PWD)-Dept. of PWD

(Computer No. 1110493). According to the report

from the working wing, the work completed so far

has been executed in accordance with the work

specifications, and measurements have been

recorded in the Measurement Book (MB). Payment

has also been made, except for the full rate of

13

Dense Bituminous Macadam (DBM) and payment

for a certain quantity of earthwork carried out,

which are pending due to post- level measurement

and subsequent calculations.

However, the Road and Building Research

Institute will cross-check the work and submit a

report at the earliest.

The concerned Executive Engineer has been

directed to make necessary preparation for the

immediate repair of the road by inviting a fresh

Notice Inviting e-Tender (NIeT) under the Non-Plan

Head, subsequent to the decision to close the

present tender.”

22. As per the said Minutes of Meeting, the respondents have already

moved proposal for foreclosure of the existing contract with no defect

liabilities and for inviting a fresh Notice Inviting e-Tender. The

respondent authorities after the period of five moths from the decision

taken in the meeting issued a notice to the petitioner on 2

nd June,

2025, by suo moto extension of time up to 6

th September, 2025, for

immediate rectification of work executed by the petitioner.

23. Now the question whether after taking a decision for foreclosure of the

work awarded to the petitioner and initiation of fresh tender, the

respondents can suo moto extend the time for rectification of the work

executed by the petitioner.

24. Before the meeting held on 27

th

January, 2025, the Chief Engineer (HQ)

by a letter dated 24

th

January, 2025, requested the Chief Engineer and

Director, Road and Building Research Institute to carry out thorough

inspection of the work and requested to submit report. On 3

rd

April,

14

2025, the Research Officer and the Chief Engineer, Road and Building

Research Institute submitted report wherein it is concluded that

“Distress noticed during inspection may be co-related with prolonged

water stagnation (if any), Slope stability and seepage analysis, which

are beyond the present scope of work of R & BRI”.

25. In the letter dated 2

nd

June, 2025, the respondents have not stated

about the decision taken by the authorities in the meeting held on 27

th

January, 2025. The respondent authorities have filed report as well as

affidavit-in-opposition to the writ petition but the authorities have not

explained with regard to the Minutes of Meeting dated 27

th

January,

2025. In the meeting, the authorities have admitted that the road has

been severely damaged due to flooding and the subsequent passage of a

large number of heavily loaded vehicles over the damaged road. The

experts have also submitted test report wherein it is stated that the test

result is within the acceptable limit as per table 500-13 of MORTH.

26. The respondents have relied upon the mass representation submitted

by the resident of the said area with respect to damage road but the

said mass representation is of the month of August, 2024. In the

meeting dated 27

th

January, 2025, the public agitation is also taken

into consideration.

27. In the case of Kailash Nath Associates (supra) the Hon’ble Supreme

Court held that:

15

“19. The Division Bench followed the

judgment of Tilley v. Thomas. It further went on to

follow Anandram Mangturam v. Bholaram

Tanumal and held :

“32. The decision holds that the principle of

law is that where, by agreement, time is made of

the essence of the contract, it cannot be waived

by a unilateral act of a party and unless there is

consensus ad idem between the parties and a

new date is agreed to, merely because a party to

a contract agrees to consider time being

extended for the opposite party to complete the

contract, but ultimately refuses to accord

concurrence would not mean that the party has

by conduct waived the date originally agreed as

being of the essence of the contract.”

28. It is not the case of the respondent authorities that the Minutes of the

Meeting is not concluded one or the said decision is taken without any

authority or the decision dated 27

th January, 2025, is withdrawn. The

meeting was attended by the following officials:

16

29. If all the competent officials were present and have taken a decision

consciously, thus the authorities after the period of more than five

months without any justification cannot suo moto extend the time for

rectification of the work.

30. The other aspect in the matter is that on 28

th July, 2025, the

respondent no.6 has issued the impugned order of termination of

contract and forfeited the Earnest Money Deposit and Security Deposit,

subsequently the respondent no.5 who is the higher authority informed

the petitioner if the petitioner took up rectification and complete the

work in all aspect, then the penalty which has been imposed may be

considered. Again on the same day, the respondent no. 5 informed the

respondent no. 6 that the respondent no. 6 may take necessary action

in terms of the Clause 3 of 2911 of the agreement. The said

communication reveals that before taking decision by the respondent

no. 5, the respondent no. 6 has issued the impugned order.

31. As regard to the maintainability of the writ petition in the case of

Unitech Limited (supra), the Hon’ble Supreme Court held that:

“39. A two-Judge Bench of this Court in ABL

International Ltd. v. Export Credit Guarantee

Corpn. of India Ltd., analysed a long line of

precedent of this Court to conclude that writs

under Article 226 are maintainable for asserting

contractual rights against the State, or its

instrumentalities, as defined under Article 12 of the

Indian Constitution.

39.1. Speaking through N. Santosh Hegde, J.

the Court held :

17

“27. … the following legal principles

emerge as to the maintainability of a writ

petition:

(a) In an appropriate case, a writ

petition as against a State or an

instrumentality of a State arising out of a

contractual obligation is maintainable.

(b) Merely because some disputed

questions of fact arise for consideration,

same cannot be a ground to refuse to

entertain a writ petition in all cases as a

matter of rule.

(c) A writ petition involving a

consequential relief of monetary claim is

also maintainable.”

This exposition has been followed by this

Court, and has been adopted by the three-Judge

Bench decisions of this Court in State of

U.P. v. Sudhir Kumar and Popatrao Vyankatrao

Patil v. State of Maharashtra.

39.2. The decision in ABL International,

cautions that the plenary power under Article 226

must be used with circumspection when other

remedies have been provided by the contract. But

as a statement of principle, the jurisdiction under

Article 226 is not excluded in contractual matters.

39.3. Article 23.1 of the development

agreement in the present case mandates the

parties to resolve their disputes through an

arbitration. However, the presence of an arbitration

clause within a contract between a State

instrumentality and a private party has not acted

as an absolute bar to availing remedies under

Article 226.

39.4. If the State instrumentality violates its

constitutional mandate under Article 14 to act fairly

and reasonably, relief under the plenary powers of

Article 226 of the Constitution would lie. This

principle was recognised in ABL International.

“28. However, while entertaining an

objection as to the maintainability of a writ

petition under Article 226 of the Constitution of

18

India, the court should bear in mind the fact

that the power to issue prerogative writs

under Article 226 of the Constitution is plenary

in nature and is not limited by any other

provisions of the Constitution. The High Court

having regard to the facts of the case, has a

discretion to entertain or not to entertain a writ

petition. The Court has imposed upon itself

certain restrictions in the exercise of this

power. And this plenary right of the High

Court to issue a prerogative writ will not

normally be exercised by the Court to the

exclusion of other available remedies unless

such action of the State or its instrumentality

is arbitrary and unreasonable so as to violate

the constitutional mandate of Article 14 or for

other valid and legitimate reasons, for which

the Court thinks it necessary to exercise the

said jurisdiction.”

39.5. Therefore, while exercising its

jurisdiction under Article 226, the Court is entitled

to enquire into whether the action of the State or its

instrumentalities is arbitrary or unfair and in

consequence, in violation of Article 14. The

jurisdiction under Article 226 is a valuable

constitutional safeguard against an arbitrary

exercise of State power or a misuse of authority.

39.6. In determining as to whether the

jurisdiction should be exercised in a contractual

dispute, the Court must, undoubtedly eschew,

disputed questions of fact which would depend

upon an evidentiary determination requiring a trial.

But equally, it is well settled that the jurisdiction

under Article 226 cannot be ousted only on the

basis that the dispute pertains to the contractual

arena. This is for the simple reason that the State

and its instrumentalities are not exempt from the

duty to act fairly merely because in their business

dealings they have entered into the realm of

contract. Similarly, the presence of an arbitration

clause does (sic not) oust the jurisdiction under

Article 226 in all cases though, it still needs to be

decided from case to case as to whether recourse to

a public law remedy can justifiably be invoked.

39.7. The jurisdiction under Article 226 was

rightly invoked by the Single Judge and the

19

Division Bench of the Andhra Pradesh High Court

in this case, when the foundational representation

of the contract has failed. Tsiic, a State

instrumentality, has not just reneged on its

contractual obligation, but hoarded the refund of

the principal and interest on the consideration that

was paid by Unitech over a decade ago. It does not

dispute the entitlement of Unitech to the refund of

its principal.”

32. In the case of Subodh Kumar Singh Rathore (supra), the Hon’ble

Supreme Court held that:

“128. The sanctity of public tenders lies in

their role in upholding the principles of equal

opportunity and fairness. Once a contract has come

into existence through a valid tendering process, its

termination must adhere strictly to the terms of the

contract, with the executive powers to be exercised

only in exceptional cases by the public authorities

and that too in loathe. The courts are duty bound to

zealously protect the sanctity of any tender that

has been duly conducted and concluded by

ensuring that the larger public interest of upholding

bindingness of contracts are not sidelined by a

capricious or arbitrary exercise of power by the

State. It is the duty of the courts to interfere in

contractual matters that have fallen prey to an

arbitrary action of the authorities in the guise of

technical faults, policy change or public interest,

etc.

129. The sanctity of contracts is a

fundamental principle that underpins the stability

and predictability of legal and commercial

relationships. When public authorities enter into

contracts, they create legitimate expectations that

the State will honour its obligations. Arbitrary or

unreasonable terminations undermine these

expectations and erode the trust of private players

from the public procurement processes and tenders.

Once a contract is entered, there is a legitimate

expectation, that the obligations arising from the

contract will be honoured and that the rights

arising from it will not be arbitrarily divested except

for a breach or non-compliance of the terms agreed

thereunder. In this regard we may make a

20

reference to the decision of this Court

in Sivanandan C.T. v. High Court of Kerala wherein

it was held that a promise made by a public

authority will give rise to a legitimate expectation

that it will adhere to its assurances. The relevant

portion reads as under:

“18. The basis of the doctrine of legitimate

expectation in public law is founded on the

principles of fairness and non-arbitrariness in

Government dealings with individuals. It

recognises that a public authority's promise or past

conduct will give rise to a legitimate expectation.

The doctrine is premised on the notion that public

authorities, while performing their public duties,

ought to honour their promises or past practices.

The legitimacy of an expectation can be inferred if it

is rooted in law, custom, or established procedure.

* * *

45. The underlying basis for the application of

the doctrine of legitimate expectation has expanded

and evolved to include the principles of good

administration. Since citizens repose their trust in

the State, the actions and policies of the State give

rise to legitimate expectations that the State will

adhere to its assurance or past practice by acting

in a consistent, transparent, and predictable

manner. The principles of good administration

require that the decisions of public authorities must

withstand the test of consistency, transparency,

and predictability to avoid being regarded as

arbitrary and therefore violative of Article 14.”

33. In the case is hand, the petitioner has challenged the order of

termination. It is the specific case of the petitioner that once the

respondent authorities have taken a decision in the meeting for

foreclosure of the work after considering the whole aspect of the matter

and taking into consideration of report that the petitioner is at no fault

of the damages occurred to the work executed by the petitioner and

after the period of five months without recalling or withdrawing the

21

decision of the meeting dated 27

th January, 2025, the respondent

authorities in an arbitrary manner suo moto extended the time and

directed the petitioner to rectify the damages. The petitioner has filed

the writ petition on the ground of arbitrary act of the respondent

authorities.

34. Considering the above, the impugned Memo No. 1515 dated 28

th

July,

2025, is set aside and quashed.

35. WPA No. 17733 of 2025 is allowed.

Parties shall be entitled to act on the basis of a server copy of the

Judgment placed on the official website of the Court.

Urgent Xerox certified photocopies of this judgment, if applied for,

be given to the parties upon compliance of the requisite formalities.

(Krishna Rao, J.)

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