Facts of the Case

This is a public-works contract dispute, not a GST case — GST appears only as a component of the total tendered contract value. The petitioner had been declared the successful bidder for a road reconstruction project in the Gangotri region of Uttarkashi district, with an acceptance letter dated 09.03.2021 fixing the contract value at Rs. 1,02,60,109.25 (inclusive of GST of Rs. 10,99,297.42). The petitioner claimed the acceptance letter, requiring deposit of performance security within seven days, was received late (on 22.03.2021) and that despite attempting to comply, he was not permitted to do so by the respondents themselves. Without communicating any cancellation, the respondents issued a fresh Notice Inviting Tender (NIT) on 26.06.2021; the petitioner later learned that his contract had in fact been cancelled on 10.05.2021, for failure to deposit the performance security and additional security within the stipulated time, resulting in forfeiture of part of his earnest money.

Issues Involved

  1. Whether the cancellation of the petitioner's work order was legally justified.
  2. Whether the respondents should be restrained from proceeding with the fresh tender process initiated after the cancellation.

Petitioner's Arguments

  • The acceptance letter was received late, and although the petitioner sought to comply with its conditions, he was not permitted to do so.
  • The respondents proceeded to invite a fresh tender without ever communicating the cancellation of his contract.

Respondent's Arguments

  • The petitioner failed to deposit the performance security and additional security within the time stipulated in the acceptance letter, despite repeated telephonic reminders, justifying cancellation and partial forfeiture of the earnest money.

Court Order / Findings

  • The Court found that there were disputed questions of fact regarding whether the cancellation of the work order was legally justified, including questions about timely communication and compliance, which could only be determined through civil proceedings, not a writ petition.
  • Since the work order had admittedly been cancelled on 10.05.2021, the Court declined to restrain the respondents from proceeding with the fresh tender initiated on 26.06.2021.
  • The writ petition was dismissed, leaving the petitioner free to pursue his civil remedies in appropriate proceedings, with no order as to costs.
  • The Court noted that an interim stay on the fresh tender process had been in effect during the pendency of the petition and directed the respondents to now examine the feasibility of proceeding with that tender.

Important Clarification

The GST figure quoted in the acceptance letter was simply part of the total contract price — the Court did not examine or rule on any GST question. The core holding is that disputed factual questions about a contract's cancellation are not suited to writ jurisdiction and must be litigated as a civil suit.

Sections Involved

  • Constitution of India — Article 226 (limits of writ jurisdiction over disputed facts)

Decision – In Favour of

Decided against the petitioner on maintainability; the writ petition was dismissed, and he was relegated to civil remedies to pursue the cancellation dispute on merits.

Case Details

Court: High Court of Uttarakhand at Nainital  |  Case No.: Writ Petition (M/S) No. 1322 of 2021  |  Coram: Hon'ble The Chief Justice Sri Vipin Sanghi and Hon'ble Sri Justice Rakesh Thapliyal  |  Date: 21 June 2023

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