Executive Engineer's Unilateral Liability Determination Overturned, Emphasizing Need for Impartial Forum

The court held that an Executive Engineer could not unilaterally determine liability for breach of contract as it lacked impartiality. Emphasizing the need for an independent forum, the court quashed the assessments made by the Executive Engineer, citing legal principles against self-judgment in legal matters. The judgment clarified limitations on a party's authority in breach of contract scenarios, highlighting the importance of impartial adjudication.

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Issues:
1. Determination of liability by the Executive Engineer in case of breach of contract.

Analysis:
The case involved a dispute regarding the liability for breach of an agreement between the petitioner and the second respondent, an Executive Engineer. The petitioner was awarded a repair work contract, but due to alleged non-supply of necessary materials, the work was not completed within the stipulated time frame. The department contended that the petitioner's default led to the incomplete work, resulting in the contract being awarded to another party at the petitioner's risk and costs. The second respondent assessed the liability at a specific amount, which the petitioner disputed.

The petitioner argued that the second respondent lacked the authority to determine liability in case of a breach of contract. The petitioner maintained that the work delay was due to the department's fault and not his own. The petitioner cited legal precedents, including decisions of the Supreme Court and the Kerala High Court, to support the argument that only an independent entity could adjudicate on breach of contract issues, not a party to the contract like the second respondent.

On the other hand, the Government Pleader relied on specific clauses of the contract to assert that the second respondent had the power to fix damages in case of breach. However, the court examined the relevant clauses, including Clauses 2 and 49, which outlined the consequences of breach and the authority to determine damages. The court noted that the agreement explicitly excluded arbitration and did not grant the second respondent the unilateral power to determine liability in case of a breach.

Citing legal principles emphasizing impartial adjudication and the prohibition against a party judging its cause, the court held that the second respondent, being a party to the contract, could not unilaterally determine liability for breach. The court emphasized the need for an independent forum to resolve disputes related to breach of contract. Consequently, the court allowed the writ petition, quashing the assessments of liability made by the second respondent.

In conclusion, the judgment clarified the limitations on a party's authority to determine liability in a breach of contract scenario, highlighting the importance of impartial adjudication and the prohibition against self-judgment in legal matters.

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