RCC-ACC (Jv) v. Board Of Major Port Authority For Port Of Cochin Willingdon Island
2026-03-11
Ziyad Rahman A A
body2026
DailyLaw.ai
JUDGMENT : Ziyad Rahman A.A., J. The petitioner is a joint venture, which was entrusted with a work for the 2nd respondent, and the 1st respondent is the implementing agency. The agreement was executed between the petitioner and the 1st respondent on 22.08.2022. The scope of the work, as per the agreement, is the refurbishment of old pre-existing sheds of the 2nd respondent Port Authority. Based on the agreement executed between the parties and in fulfilment of the terms and conditions therein, the petitioner had started the work, and according to it, 70% of the work has been completed. 2. According to the petitioner, during the course of execution of the work, certain changes in the nature of the work became necessitated, which were to the effect that, instead of refurbishment, certain reconstructions were to be carried out. According to the petitioner, the work to be carried out falls within the area in which the sanction under the Regulations of Coastal Regulation Zone (CRZ) is required. Although, the 2nd respondent had already obtained a sanction from the authority under CRZ regulations, for the work originally provided to the petitioner, which is the refurbishment of certain buildings, for the revised work that amounts to reconstruction, no permission under the CRZ was obtained. As the petitioner apprehended that, the proceeding with the construction without such permission, may expose them to legal proceedings by the authorities of CRZ, Ext.P10 communication was issued by the petitioner to the 1st respondent, highlighting this aspect, and requiring them to indemnify the petitioner. 3. In response to Ext.P10, Ext.P11 was issued by the 1st respondent wherein, it is made clear that, as far as issues connected with the CRZ applications and the approvals are concerned, they do not fall under the purview of the contractor and hence, the petitioner has to execute the said work as per the contract entered between the parties. 4. Subsequently, Ext.P15 show cause notice was issued by the 1 st respondent on 21.11.2025 in which, the petitioner was required to show cause within 10 days, why an action under clause 3 (a) and (c) in the General Conditions of the Contract shall not be taken against the petitioner, on account of breach of contract.
4. Subsequently, Ext.P15 show cause notice was issued by the 1 st respondent on 21.11.2025 in which, the petitioner was required to show cause within 10 days, why an action under clause 3 (a) and (c) in the General Conditions of the Contract shall not be taken against the petitioner, on account of breach of contract. In the said notice, the petitioner was also required to furnish the reasons for the delay in implementation of the project and was also required to submit an action plan to complete the project within the stipulated time, to the satisfaction of the 1st respondent. 5. Ext.P16 was issued by the petitioner in response to Ext.P15 show cause notice, wherein, the allegations are denied and also highlighted various reasons, which, according to the petitioner, caused delay in continuing the project. This communication was issued on 01.12.2025. On the same day, the petitioner issued Ext.P14 notice invoking the clause 26 in the agreement delaing with force majeure. This notice was issued by the petitioner, due to the reason that, according to the petitioner, certain events which qualify to be termed as force majeure as defined under clause 26.4. (p) of the agreement has occurred and thus, the petitioner has a duty to report, as contemplated under Clause 26.5. In response to Ext.P1, Ext.P17 was issued by the 1 st respondent to the petitioner, requesting the petitioner to vacate labourers from labour hutments within three days and to close all labour facilities, as the petitioner had temporarily suspended the subject work with effect from 30.11.2025 due to CRZ link approval and no works are progressing at the site. 6. Aforesaid notice was followed by Ext.P22 order of termination, wherein, citing several grounds, the contract was terminated. The consequences of the termination have been mentioned in clause of Ext.P22, which include the forfeiture of performance guarantee, direction to hand over the site, material, the taking of final measurements, and along with the same, it was also advised that, the termination may result in the petitioner's firm, including joint venture partners, being debarred from participating in future Cochin Port Authority tenders for a period of two years. In the meantime, the petitioners approached the Commercial Court, Ernakulam, by invoking Sec.9 of the Arbitration and Conciliation Act, 1996 , against the show cause notice issued.
In the meantime, the petitioners approached the Commercial Court, Ernakulam, by invoking Sec.9 of the Arbitration and Conciliation Act, 1996 , against the show cause notice issued. According to the petitioner, while the said application was pending consideration, the order of termination of the contract was passed, as evidenced by Ext.P22, and the writ petition is submitted in such circumstances, challenging Ext P22. 7. Separate counter affidavits were submitted by the 1st and 2nd respondents, wherein, the averments contained in the writ petition are denied, and the reliefs are opposed. The question of maintainability of the writ petition was also raised by the respondents, in view of the arbitration clause in the agreement, and also pointing out that the petitioner has already approached the Commercial Courts, invoking the Arbitration and Conciliation Act, 1996 . 8. I have heard G.Shrikumar, the learned Senior Counsel appearing for the petitioner, Sri. Joson Manavalan, the learned counsel appearing for the 1st respondent and Sri. Joseph Markose, the learned senior counsel appearing for the 2nd respondent. 9. The learned senior counsel appearing for the petitioner elaborately argued the matter, highlighting the discrepancies in Ext.P22 termination order, mainly pointing out that, the grounds raised therein are not specified in Ext.P15 show cause notice and thus, the same amounts to violation of the principles of natural justice. Apart from the above, it was also contended that the petitioner had already invoked the force majeure clause, under clause 26 of the agreement, by issuing Ext.P14, but the same was not responded to by the respondents, by submitting any reply either by denying the existence of a matter that comes within the force majeure or otherwise explaining the same. According to the learned senior counsel, without even considering the same, the respondents have proceeded to terminate the contract as per Ext.P22 and therefore, an interference is required. 10. On the other hand, the learned senior counsel for the 2nd respondent would point out that, no event to attract the force majeure clause, as contemplated in clause 26 of the agreement, has occurred and in Ext.P15 show cause notice itself, they have highlighted the fact that the work is not progressing with the pace as required and hence the petitioner was required to furnish an action plan to complete the work.
However, in the reply submitted by the petitioner, no such action plan was provided and no explanation satisfactory to the respondents were furnished. Therefore, according to the learned senior counsel, in such circumstances, the respondent had invoked the powers available as per the terms and conditions in the contract. The said contract contains an arbitration clause, which they have already invoked in connection with the additional work, and even in respect of the question of termination, it is open to the respondents to invoke the said right. The fact that the petitioner had already approached the Commercial Court invoking section 9 of the Arbitration and Conciliation Act, against the show cause notice issued was also highlighted. Therefore, it is not necessary for this Court to invoke the jurisdiction under Article 226 of the Constitution of India, contended the learned senior counsel for the 2 nd respondent. 11. I have carefully gone through the records and considered the contention raised by all the parties. One of the main contentions raised by the learned senior counsel for the petitioner is that, the Ext.P22 termination order was passed without issuing a proper show cause notice containing the reasons, based on which the same was issued. On the other hand, the specific contention put forward by the learned senior counsel for the respondents is that Ext.P15 show cause notice does contain certain aspects which were reiterated in Ext.P22. On carefully going through the contents of Ext.P15, I find that, even though it does not contain all the grounds that are referred to in Ext.P22, it does contain the matters regarding the delay in completing the work, and the petitioner was required to submit an action plan as well. The same is reiterated in Ext.P22. 12. Of course it is true that, apart from the reasons mentioned in Ext.P15 show cause notice, other grounds are also referred to in Ext.P22 for the purpose of terminating the contract. However, I am of the view that, that by itself cannot be a reason to interfere in the said process, by invoking the powers of Article 226 of the Constitution of India, in view of the fact that, these are matters to be determined by the fact-finding authorities.
However, I am of the view that, that by itself cannot be a reason to interfere in the said process, by invoking the powers of Article 226 of the Constitution of India, in view of the fact that, these are matters to be determined by the fact-finding authorities. As far as the remedial mechanism contemplated under the agreement is concerned, the same includes an arbitration clause and therefore, the petitioner is having an effective remedy by invoking the same. It is to be noted in this regard that, the petitioner had already invoked Sec.9 of the Arbitration and Conciliation Act, touching upon the dispute in question, by approaching the Commercial Court Ernakulam challenging the show cause notice, which resulted in Ext P22. Even though the said proceeding has been withdrawn, it demonstrates the fact that, even according to the petitioner, there exists an arbitrable dispute. Therefore, I do not find any justifiable reason to entertain this writ petition under Article 226 of the Constitution of India as the resolution of the dispute involves adjudication of disputed questions of fact. 13. However, as rightly pointed out by the learned senior counsel appearing for the petitioner, one of the proposals made in Ext.P22 is to initiate proceedings for blacklisting. An apprehension was raised by the learned senior counsel appearing for the petitioner that, on the strength of Ext.P22, the petitioner is likely to be blacklisted in respect of other works. In this regard, the learned senior counsel appearing for the 2 nd respondent points out that, Ext.P22 per se, does not amount to an order of blacklisting, even though it can be a cause of action for initiating a proceeding for blacklisting. 14. After examining the all relevant aspects, I am of the view that, as far as blacklisting is concerned, the same can only be done, after issuing notice to the petitioner and after completing the proceedings, in relation to the same in accordance with law, which would include the providing an opportunity to be heard to the petitioner. Since that stage is not reached as of now, there is no room for apprehension and necessity to consider the said aspect in this writ petition. Hence, I do not find any justifiable reason to entertain this writ petition.
Since that stage is not reached as of now, there is no room for apprehension and necessity to consider the said aspect in this writ petition. Hence, I do not find any justifiable reason to entertain this writ petition. In such circumstances, this writ petition is dismissed, without prejudice to the right of the petitioner to invoke the remedies under the Arbitration and Conciliation Act or any other civil remedies available. It is clarified that, this Court has not expressed any opinion on the contentions of any of the parties touching upon the dispute.