HC dismisses petition against Centre's termination of India-Myanmar-Thailand trilateral road contract

The writ petition was filed by a company, Niraj Cement Structural Ltd against the Union of India and others, alleging arbitrariness and lack of notices per the terms of the contract.

The Manipur High Court has dismissed an appeal made against the decision of a Single Judge Bench of the court declining to assume jurisdiction over a contractual dispute arising out of the India-Myanmar-Thailand Trilateral road project, last week.

The writ petition was filed by a company, Niraj Cement Structural Ltd against the Union of India and others, alleging arbitrariness and lack of notices per the terms of the contract. 

The judgment resolved a complex commercial dispute arising out of the construction of 69 bridges on the approach road to India-Myanmar-Thailand road. 

The contractor (petitioner) alleged that the Detailed Project Report (DPR) is technically defective and not viable to build a single bridge let alone 69. And the termination of contract is an attempt to cover up the inherent error in the DPR feasibility report. 

However, the respondents objected that the writ petition is not maintainable, stating it is an abuse of the process of court. Further, the termination notice is perfectly in order as per article of the agreement.

A single judge of the High Court of Manipur had ruled that the court did not have the jurisdiction to entertain the issue. But, the petitioner filed an intra-court appeal challenging the Single Judge verdict. However, due to pandemic the hearing of the petition was being delayed. But with due direction of the Supreme Court, the division bench resumed hearings resolved expeditiously. 

The division bench comprising Chief Justice Ramalingam Sudhakar and Justice Lanusungkum Jamir on the judgment stated that 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 vehement on the basis of article 23.1.2 of the agreement. The respondents also denied such allegations with equal proportion. 

“We are conscious of the fact that Writ courts normally do not enter into the arena of interpretation of the terms of contract".

Although the jurisdiction of the High Court had been invoked by alleging violation of fundamental rights and arbitrariness, the bench was compelled to pronounce a judgment, it was stated.

While hearing, the court found that the documents produced did not reflect the appellant's contention that there was a lack of proper notice or opportunity to respond to the allegation made. It was observed that 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 projects.

The court also declared that the decision to terminate the contract was not taken hastily or arbitrarily. On the judgment, it was stated that in the earlier show cause notice, the 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 was not taken in haste or in an arbitrarily.

The court observed that the appellant who primarily pitched the writ petition on the interpretation of the article 23.1.2 of the agreement cannot abandon from other parts of the agreement, particularly the article relating to the 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,” the court observed.

First Published:Aug. 30, 2020, 10:17 p.m.