TaxTMI 
TaxTMI 
2017 (8) TMI 1602
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....ment Concrete in situ lining, Colaba fixing and construction & repair of structures of 14 Nos. minors of Kharkhara Right Bank Canal System in which he participated and ultimately, his bid was found viable and he was awarded work by order dated 27-1-2009. Accordingly, the petitioner deposited security amount and earnest money and started work, but on account of repeated release of water in the said canal, work allotted to him could not be completed and exclusively, the default was attributable to the State authorities. But, ultimately, ignoring the request for extension of time, the petitioner's contract was terminated on 30-8-2012 and though it was subjected to re-tendering, but it could be re-tendered only on change of tender conditions and yet, by orders Annexures P-1, P-2 and P-3, recovery of Rs. 323.076 lakhs has been sought to be imposed against the petitioner and entire payment of other works has been stopped. 2.2) Return has been filed by the State Government stating inter alia that the petitioner is guilty of not completing the work right in time as the State has huge loss in addition to the fact that the work in question could not be completed and there is huge W.P.(....
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....er writ petition against action of the State authorities seeking to recover disputed amount would be maintainable or not. This question is no longer res integra and in M/s. Macadum Makers (supra), a Division Bench of this Court while relying upon the decisions of the Supreme Court in the matters of ABL International Ltd. and another v. Export Credit Guarantee Corporation of India Ltd. and others (2004) 3 SCC 553), Karnataka State Forest Industries Corporation v. Indian Rocks (2009) 1 SCC 150), Sushila Chemicals Private Ltd. and another v. Bharat Coking Coal Limited and others (2010) 10 SCC 388) and Kisan Sahkari Chini Mills Ltd. and others v. Vardan Linkers and others (2008) 12 SCC 500), held that writ petition is maintainable in case of contractor taking recourse to extraordinary remedy seeking to invoke writ jurisdiction of Court, alleging action of State authorities as arbitrary and unreasonable. 7. The next question for consideration would be whether the State authorities are justified in issuing notice for recovery of the aforesaid subject amount in dispute without having due adjudication by the competent authorities. 8. In the matter of State of Karnataka etc. v. ....
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....nt unless the amount is held to be due and recoverable by way of adjudication either by the Court or by the Arbitration Tribunal, and observed as under: - "It will be clear from second sentence of the aforesaid clause that in the event of the security being insufficient or if no security has been taken from the contractor, then the balance or the total sum recoverable, as the case may be, shall be deducted from any sum then due or which at any time thereafter may become due to the contractor under the instant or any other contract with the Govt.. The expression 'sum recoverable' would mean any sum that is admitted by a contractor to be due to the Govt. or that is disputed by the contractor but adjudicated by the Court or the arbitrator to be due and recoverable form the contractor. This can be the only interpretation of Clause 4.3.39.1 consistent with the principle of natural justice that no person can be a Judge of his own cause. In case, it is held, as has been held by the Arbitration Tribunal that the "sum recoverable" is any amount which the Govt. or any authority of the Govt. considers to be recoverable from the contractor, then the Govt. or such authority will be a ....
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....ssing damages arising out of breach are two different and distinct concepts and right to assess damages arising out of a breach would not include a right to adjudicate upon as to whether there was any breach at all and one of the parties to an agreement cannot reserve to himself the power to adjudicate whether the other party has committed breach. 13. Very recently, in the matter of M/s. Gangotri Enterprises Ltd. v. Union of India and others (AIR 2016 SC 2199), the Supreme Court while considering the question of encashment of bank guarantee has held that the sum claimed by the respondents from the appellant is in the nature of damages, which is not yet adjudicated upon arbitration proceedings. Their Lordships observed in paragraph 42 of their report as under: - "42. On perusal of the record of the case, we find that firstly, arbitration proceedings in relation to the contract dated 22.08.2005 are still pending. Secondly, the sum claimed by the respondents from the appellant does not relate to the contract for which the Bank Guarantee had been furnished but it relates to another contract dated 22.08.2005 for which no bank guarantee had been furnished. Thirdly, the sum claimed by ....